Import Intensity of Production, Tasks and Wages: Micro-Level Evidence for Poland

Abstract

A B S T R A C T Objective: This article relates to recent literature on labour market consequences of production fragmentation within Global Value Chains, analysed in the presence of workers’ heterogeneity and differences in the task content of jobs. The main aim is to assess if there is a relationship between wages of Polish workers and the degree of Polish production dependence on imported inputs. Research Design & Methods: Using microdata from EU-SILC on workers from Poland observed in 2008-2014, we estimate a Mincerian model, augmented by a measure of task content of occupations and the industry level index of the import intensity of production computed with input-output data and accounting for good’s production sequence). IV estimation is employed to account for potential endogeneity between the import intensity of production and wages. Findings: Regression results suggest that negative relationship between wages of Polish workers and the dependence of their sector of employment on foreign inputs is magnified by the routinisation level of the occupation. Hence occupation-specific task requirements play a role. Implications & Recommendations: It implies that not all the Polish workers are affected in the same. The movements towards jobs with higher degree of non-routine content could protect against negative wage effects of fragmentation. Contribution & Value Added: The relationship between wages in Poland and the reliance on foreign inputs and GVCs links has not yet been studied from the micro-level task-based perspective. This article fills in this gap.

Keywords

• import intensity of production
• global value chains
• production fragmentation
• wages
• tasks