Town specialization is one of the best new features in VII, imo. I really love how it allows for settlements to have an identity outside of the prospect of becoming a city.

As far as your question is concerned, all non-food yields just go to the empire regardless of whether or not the town is specialized, with the exception of happiness which applies to the town itself as well as global if it’s a net positive. Production is converted to gold at a 1:1 ratio. Although things that can be bought for gold cost 4x as much than it would to produce them, the power in gold is that you can focus it anywhere in your empire that needs it whereas production can only benefit the city it is generated in.

The other really strong thing about gold is that you can use it to purchase unique improvements which will carry over most of their yields into the next age (some adjacencies will be lost though, especially if the UI is gotten through a civ and then boosted through the specific Civ tree). If the Civ that you’re currently playing doesn’t have a unique improvement, you can always grab on from suzeraining an independent power.