Extending the Multiregional Input-Output Framework to Labor-Related Impacts: A Proof of Concept

Abstract

Given the high potential shown by the recent developments in environmentally extended and multiregional input-output (I-O) analysis, a natural step would be to extend this theoretical framework beyond the environmental dimension to include the social dimension, in line with parallel advancements in social life cycle assessment. The ideal results would be a multiregional I-O database to investigate not only environmental footprints, but also social footprints. Qualitative and subjective characteristics of social issues, complex impact pathways, and data scarcity challenge the extension of the I-O framework to social impacts. These challenges are addressed in this study where the Exiobase database was extended with new data on five quantitative indicators available from the International Labor Organization: employment; working hours; salary; occupational accident cases; and unemployment. This required modeling steps, such as the disaggregation of data from sector to product group level, and filling the data gaps for missing countries by primary data collection or interpolation. A characterization step where indicator values are converted into social impacts on human productivity and human well-being measured in quality-adjusted life years was then performed. The results show an appreciable match between the databases, with justifiable interpolations for missing countries. The study demonstrates how to obtain an open and quantitative I-O database extended with indicators on labor-related impacts and discusses approaches to overcome the challenges of this process.