ABSTRACT
Indonesia’s apparel industry is well known as being one of the top apparel exporters that make a significant contribution to the global apparel industry, meaning that the industry is already involved in the global value chain. One of the issues related to labor economics is whether the global value chain demands low-skilled or high-skilled labor. This paper analyzes the effect of the global value chain on the demand for skilled labor. The result is that the global value chain demands lower-skilled rather than high-skilled labor, because expanding business globally needs more low-skilled labor than high-skilled labor. Moreover, the decrease in high-skilled labor causes labor productivity to increase during involvement in the global value chain.
