Robert Grundke (OECD)

“Having the right Mix: The Role of Skill Bundles for Comparative Advantage and Industry performance in Global Value Chains”

abstract

This study assesses the effects of countries’ skill endowments on comparative advantage. It tests the theoretical model of Ohnsorge and Trefler (2007) and thus departs from empirical studies assuming that workers possess only one type of skill (generally measured by educational attainment). It argues that it is the bundling of various skills at the worker level and their joint distribution that matter for specialisation, and uses information on assessed cognitive skills from the OECD Survey of Adult Skills (PIAAC) and on trade in value added from the OECD-WTO TiVA database to test the predictions of the model. Results show that the skill bundle distribution has a larger effect on specialisation than the relative endowment of workers possessing different levels of one single skill.