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Upstreamness, wages, and workers’ origin: A review of the literature

Par : Contributeur(s) : Type de matériel : TexteTexteLangue : français Détails de publication : 2020. Sujet(s) : Ressources en ligne : Abrégé : In recent decades, production processes have become increasingly fragmented and divided into ever smaller parts. This fragmentation, which is particularly pronounced in small open economies such as Belgium, has resulted in the emergence of global value chains (GVCs). At the same time, net immigration in OECD countries has been consistently positive since the 1960s. Between 2000 and 2017, the number of foreign-born residents (i.e., first-generation immigrants) in OECD countries rose by more than 50 percent (OECD, 2018). Starting from these premises, this article aims to provide a succinct overview of the literature on the nexus between firms’ position in global value chains (i.e. their level of upstreamness) and the native–immigrant wage gap. To do so, we first discuss the potential sources of wage inequalities based on workers’ origin. Next, we present the main findings concerning the impact of upstreamness on workers’ wages in general, and in particular the interplay between upstreamness and wage inequalities between natives and immigrants. Particular attention is devoted to empirical results for the Belgian economy. JEL Classification: J15, J31, F16.
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In recent decades, production processes have become increasingly fragmented and divided into ever smaller parts. This fragmentation, which is particularly pronounced in small open economies such as Belgium, has resulted in the emergence of global value chains (GVCs). At the same time, net immigration in OECD countries has been consistently positive since the 1960s. Between 2000 and 2017, the number of foreign-born residents (i.e., first-generation immigrants) in OECD countries rose by more than 50 percent (OECD, 2018). Starting from these premises, this article aims to provide a succinct overview of the literature on the nexus between firms’ position in global value chains (i.e. their level of upstreamness) and the native–immigrant wage gap. To do so, we first discuss the potential sources of wage inequalities based on workers’ origin. Next, we present the main findings concerning the impact of upstreamness on workers’ wages in general, and in particular the interplay between upstreamness and wage inequalities between natives and immigrants. Particular attention is devoted to empirical results for the Belgian economy. JEL Classification: J15, J31, F16.

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