Global trade in services, jobs, and incomes

The globalization of the world economy has been propelled by increasing movements of intermediate products, capital and labor across borders. These developments have stirred recent debate with respect to the implications for the analysis of international trade and the impact of trade on a country’s well-being. This thesis uses input-output analyses and focusses on three types of trade flows – trade in services, jobs, and incomes – to measure trade and assess its impact from different perspectives (mostly at the country-level).

First, using the WIOD, the understudied role of services in trade is analyzed in the context of globalization. Trade of value-added in services is shown to have grown in importance relative to trade of value-added in manufacturing, and to have a stronger interregional character.

Second, labor footprint analyses are employed to calculate the domestic and foreign workers embodied in a country’s consumption of final products. It is found that US consumption increasingly relies on foreign workers. Many countries, including the US, could not sustain their current consumption levels in a hypothetical autarky situation by using only currently employed workers.

Third, a matrix relating countries’ GDP to their GNI is created and used together with calculations of value-added exports to derive bilateral trade in income figures for 42 countries. These figures reveal the dependence of countries’ national income (GNI) on foreign final demand. Most countries, especially high-income, exported more income than value-added. Furthermore, the US trade deficit in terms of income was much less than its trade deficit in terms of value-added.