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Labor Composition of Fixed Costs, Heterogeneous Firms, and the US Labor Market

In: POLICY ANALYSIS AND MODELING OF THE GLOBAL ECONOMY A Festschrift Celebrating Thomas Hertel

Author

Listed:
  • Zeynep Akgul
  • Caitlyn Carrico
  • Marinos Tsigas

Abstract

Recent advances in theoretical and empirical trade literature on heterogeneous firms confirm that regulatory (fixed) costs can prevent firms with low-productivity levels from producing and exporting. Majority of firms struggle to survive particularly in industries where these costs are high, potentially leading to substantial effects on the labor market. This paper investigates the effect of reductions in fixed costs on the US labor market based on a firm-heterogeneity extension of the Global Trade Analysis Project (GTAP-HET), Computable General Equilibrium (CGE) model, where the US labor data are expanded to 22 occupations. This extension enriches the labor market analysis and provides an avenue to investigate the factors determining fixed costs. Particularly, we distinguish between the labor types that are employed to cover fixed costs as opposed to those that cover variable costs.

Suggested Citation

  • Zeynep Akgul & Caitlyn Carrico & Marinos Tsigas, 2021. "Labor Composition of Fixed Costs, Heterogeneous Firms, and the US Labor Market," World Scientific Book Chapters, in: Peter Dixon & Joseph Francois & Dominique van der Mensbrugghe (ed.), POLICY ANALYSIS AND MODELING OF THE GLOBAL ECONOMY A Festschrift Celebrating Thomas Hertel, chapter 7, pages 199-248, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789811233630_0007
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    Keywords

    Computable General Equilibrium Modeling; CGE Models; Trade Policy Modeling; GTAP; Global Trade Analysis Project; Trade Impact Assessments; Sustainability Impact Assessments; Trade and Employment; Trade and Climate; Globalization; Preferential Trade Agreements; Thomas Hertel;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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