The Impact Of Global Value Chains Participation On Employment Of China

Global value chains have achieved great development and have become a new model of economic globalization and international division of labor.Reform and opening up,with cheap and abundant labor resources,China has rapidly integrated into the global value chain division through processing trade.Participation in global value chain division has created a large number of job opportunities and promoted rapid economic development.However,China is currently located on the downstream end of the global value chains.In this context,most created job opportunities are for low-wage,low-skilled labour.In fact,with the development of economy,the supply structure of China’s labor market has undergone a transformation.With the increasing number of highly educated personnel,the supply structure of China’s labor market has upgraded.Employment demand structure and supply structure begin to show a huge mismatch,resulting in the imbalance of China’s employment market.Therefore,it is urgent to clearly understand the mechanism of the impact of global value chain on employment and clarify the relationship between global value chain participation and employment in China.In view of this,this article elaborates from the following aspects:Firstly,on the basis of relevant research on the impact of global value chain on employment,this paper concludes that global value chain participation mainly affects employment through four mechanisms:substitution effect,scale effect,demand elasticity and technology.Secondly,based on UIBE GVC Index database,this paper calculates and analyses the Chinese industries’ GVC participation indexes,production length and GVC position indexes from 2000 to 2014.China’s participation in the global value chains is deeper,and the backward participation indexes are greater than the forward participation indexes.Besides,China is located on the downstream end of the value chains.Finally,by using world input-output tables,this paper empirically analyze the impact of participation in the global value chains on the amount of employment and employment structure in sector level.The results show that,on the whole,the effect of GVC indexes on the employment of China is different.The improvement of forward participation indexes not only contributes to the increase of total employment,but also promotes the improvement of employment structure.The effect of backward participation indexes on the amount of employment is negative,while the effect on the relative demand for skilled labor is positive.The increase of GVC position indexes has a positive effect on employment,but it is not significant.In addition,the impact of global value chain participation on employment in China varies at the industry level.