International Labor Value Transfers Through Unproductive-Sector Trade

This article explores a unique mechanism of international labor value transfers: unproductive-sector trade. We develop a model incorporating unproductive sectors and use data from the World Input-Output Database (2000–2014) to estimate these transfers. Analyzing trade patterns and value transfers for 16 countries, we find a growing importance of unproductive-sector trade in international value transfer. Notably, the United States and the United Kingdom have increasingly relied on this channel for labor value appropriation from other countries, while China has transitioned from a country with net value outflow to one with net value inflow, because of its decreasing net outflow of value through the productive-sector trade channel and its increasing net inflow of value through the unproductive-sector trade channel. JEL Classification: B51, F14