Fragmentation, Incomes and Jobs: An Analysis of European Competitiveness

57 Pages Posted: 30 Nov 2013

See all articles by Marcel P. Timmer

Marcel P. Timmer

University of Gronigen - Faculty of Economics

Bart Los

University of Groningen - Faculty of Economics

Robert Stehrer

Vienna Institute of International Economic Studies (WIIW)

Gaaitzen de Vries

University of Groningen

Multiple version iconThere are 2 versions of this paper

Date Written: November 14, 2013

Abstract

Increasing fragmentation of production across borders is changing the nature of international competition. As a result, conventional indicators of competitiveness based on gross exports become less informative and new measures are needed. In this paper we propose an ex-post accounting framework of the value added and workers that are directly and indirectly related to the production of final manufacturing goods, called "manufactures GVC income" and "manufactures GVC jobs". We outline these concepts and provide trends in European countries based on a recent multi-sector input-output model of the world economy. We find that since 1995 revealed comparative advantage of the EU 27 is shifting to activities related to the production of non-electrical machinery and transport equipment. The workers involved in manufactures GVCs are increasingly in services, rather than manufacturing industries. We also find a strong shift towards activities carried out by high-skilled workers, highlighting the uneven distributional effects of fragmentation. The results show that a GVC perspective is needed to better inform the policy debates on competitiveness.

Keywords: fragmentation, income, jobs, European competitiveness

JEL Classification: F6, J2, O47, O57

Suggested Citation

Timmer, Marcel P. and Los, Bart and Stehrer, Robert and Vries, Gaaitzen de, Fragmentation, Incomes and Jobs: An Analysis of European Competitiveness (November 14, 2013). ECB Working Paper No. 1615, Available at SSRN: https://ssrn.com/abstract=2354250

Marcel P. Timmer (Contact Author)

University of Gronigen - Faculty of Economics ( email )

Postbus 72
9700 AB Groningen
Netherlands

Bart Los

University of Groningen - Faculty of Economics ( email )

P.O. Box 800
9700 AV Groningen
Netherlands
+31 (0)50 3637317 (Phone)

Robert Stehrer

Vienna Institute of International Economic Studies (WIIW) ( email )

A-1010 Vienna
Austria

Gaaitzen de Vries

University of Groningen ( email )

P.O. Box 800
Groningen, Groningen 9747 AE
Netherlands

HOME PAGE: http://www.rug.nl/staff/g.j.de.vries/index

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