Leveraging Trade for More and Better Jobs in Developing Countries

This report has two goals: first, to better understand how trade integration impacts the quantity and quality of jobs in developing countries and the underlying channels through which workers adjust; and second, to offer data, analytics, and a clear framework to help policymakers maximize the aggregate labor market gains from trade while minimizing the adjustment costs for workers. The conceptual framework of this report highlights the factors underlying how trade impacts labor markets: (1) the nature of trade integration; (2) characteristics of people and jobs; (3) labor market channels; and (4) policies that influence all of these factors. The report benefits from newly created datasets and analysis that identify different specialization patterns of activities performed in exports and global value chains (GVCs), and quantify worker transitions out of informality or unemployment. It also offers a comprehensive policy framework for leveraging trade for more and better jobs in developing countries, distinguishing policies for people, sectors, and places. Policy priorities between countries vary, depending on the nature of trade integration and their extent of structural transformation.