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Enriching U.S. labor results in a multi-regional CGE model

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  • Carrico, Caitlyn
  • Tsigas, Marinos

Abstract

This paper proposes a new approach for enriching results for U.S. labor markets from the leading multi-regional CGE model, the GTAP model. Departing from the usual approach of expanding labor data in all economies in a model's database, our method expands only the U.S. labor data. Additionally, we introduce a novel modification to primary factor demands, generating more realistic labor markets in which lower-skilled jobs substitute more easily with other primary factors than higher-skilled jobs. The advantages of our approach are that we can rely on the most recent and the most disaggregate U.S. labor data available; we build upon the most recently available GTAP database; and, when applied to other economies, our approach is the initial contribution to a database of detailed labor statistics for several economies.

Suggested Citation

  • Carrico, Caitlyn & Tsigas, Marinos, 2014. "Enriching U.S. labor results in a multi-regional CGE model," Economic Modelling, Elsevier, vol. 36(C), pages 268-281.
    • Handle: RePEc:eee:ecmode:v:36:y:2014:i:c:p:268-281
    DOI: 10.1016/j.econmod.2013.09.030
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    References listed on IDEAS

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    1. Liu, Jing & van Leeuwen, Nico & Vo, Tri Thanh & Tyers, Rodney & Hertel, Thomas W., 1998. "Disaggregating Labor Payments By Skill Level In Gtap," Technical Papers 28722, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
    3. Stefan Boeters & Luc Savard, 2011. "The Labour Market in CGE Models," Cahiers de recherche 11-20, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Labor; Trade; CGE model; GTAP; Wage; Labor structure; Labor disaggregation;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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