In electronics and computers, for example, jobs directly linked to exports make up 19 percent of total jobs in exports in the sector in emerging countries, but 46 percent in high-income countries. In motor vehicles, the direct contribution is around 30 percent for emerging but 40 percent for high-income countries. Similar differences can be found for electrical equipment (29 vs. 51 percent), machinery (35 vs. 53 percent), but also textiles and apparel (41 vs. 65 percent), and all other manufacturing sectors except for coke. Similarly, business services export sectors show a larger direct job contribution in high-income countries such as in IT or professional services than in emerging economies. The direct contribution is smaller in agriculture, mining, and non-tradable services in high-income countries. This again reflects the higher portion of sophisticated services activities directly embodied in such exports.

# 4. Measuring job activities in exports: The role of occupations

## 4.1 Upgrading of jobs in exports across sectors

Reporting job numbers created by exports alone masks differences in the activities that countries specialize in along the value chain. The distribution of job activities in exports across five occupation categories (see Appendix 5 for details) in a sample of 59 countries and 20 industries for the years 2000 and 2018 suggests a declining role of production activities (including craft workers, machine operators, and farm laborers, among others), as countries’ per capita income progresses (Figure 17, upper panels). For the poorest countries production activities represented almost 70 percent of their exports in 2018, but this percentage dropped by almost half in the richest countries (upper-right panel). In upper-middle income countries, non-production activities become increasingly important for their exports, in particular managerial occupations, but also engineering and support services. The role of support services activities in exports, such as sales representatives or office clerks, magnifies especially for high-income countries, with their share exceeding that of production activities for the richest countries.

Several channels help explain the changing distribution of jobs in exports across occupational groups as countries develop. First, as countries become richer their comparative advantage and thus composition of their export basket changes. Second, GVC upgrading can foster a structural transformation of jobs (World Bank forthcoming). Once countries upgrade into more advanced segments of manufacturing and services GVCs, for instance, more non-production activities are embodied in a country’s exports relative to production activities, including managerial, engineering and especially other support services activities. Third, supply linkages between sectors also adjust, with the “servicification” of manufacturing exports gaining in importance as countries develop (Nayyar, Hallward-Driemeier, and Davies 2021). For instance, while food exports in low-income countries often consist of raw commodities or staples, food exports in middle- and high-income countries increasingly rely on sophisticated services embodied in those food exports beyond logistics, transportation and trade services, and include engineering, support and other services (e.g., health inspections).

In addition, changes in productivity trigger changes in relative wages across occupations which are reflected in incomes in exports (rather than jobs in exports) measures. Not surprisingly, managerial and engineering services activities account for a larger share in lower-income countries when using the income in exports measure as opposed to the jobs in exports measure (Figure 17, lower panels). This is because average incomes (and productivity levels) are higher for managers and engineers relative to workers in production and support services occupations in lower-income countries, as they are endowed with a larger relative supply of low-skilled workers (e.g., de Vries, Timmer, and de Vries 2015; McMillan, Rodrik, and Sepulveda 2017). However, such differences decline as countries get richer because relative wage gaps between these occupation categories fall.

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