Does GVC participation boost wages? Evidence from Russia’s industrial upgrading and downgrading

This study investigates how participation in global value chains (GVCs) influences wage outcomes in Russia, with a focus on heterogeneity across skill levels and task content. Drawing on micro-level data from the Russian Longitudinal Monitoring Survey (RLMS) and industry-level GVC measures, the analysis distinguishes between complex, simple, and foreign value-added GVC activities. The results show that deeper GVC integration is associated with wage polarization: low-skilled, routine-task workers experience wage penalties, while high-skilled workers engaged in upstream production benefit. Education moderates these effects, as workers with higher educational attainment tend to gain more from GVC participation across all integration types. Robustness checks, including Wald tests, confirm statistically significant differences across worker groups. The findings contribute to the literature on globalization and labor market inequality by providing evidence from a major emerging economy. The study underscores the importance of inclusive labor policies that protect vulnerable groups while leveraging GVC engagement to support broad-based wage growth.