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GTAP Resource #6580

"Creating USAGE-OCC: a CGE model of the U.S. with a disaggregated occupational dimension"
by Dixon, Peter and Maureen Rimmer

We built U.S. occupation-industry matrices for 2019 identifying employment and wagebills in 233 BLS occupations and 392 BEA industries. For each occupation the BLS gives median wage rate, educational requirements, and required experience in associated occupations.
With the occupational data attached, USAGE and GTAP can show implications of trade and other policies for employment by occupation, education and wage bands.
We formed USAGE-OCC and simulated the effects of a sustained 10 per cent increase in the real wage rates of the 14 occupations with median wage rates in 2019 less than $29,500.
The USAGE-OCC labor-market module has 5 parts:
(a) division of the workforce into categories at the start of year t reflecting workforce activities in year t-1
(b) determination of labor supply from each category to each activity
(c) determination of demand for labor in employment activities
(d) specification of wage adjustment reflecting demand and supply
(e) determination of everyone’s activity: who gets the jobs and what happens to those who don’t?
The specification of occupational mobility is an important ingredient of the labor-market module. We investigated four specifications:
(1) no special connections between occupations -- all moves are equally feasible;
(2) making the feasibility of occupational moves inversely proportional to wage differences;
(3) (2) plus differences between occupations in physical requirements as an inhibiting factor;
(4) (3) plus allowance for education/training/experience.
Under (4), the deviation from the baseline in aggregate employment in the fourth year is -1.14%. Employment in all occupations is adversely affected. For low-wage occupations the employment deviation is -2.46% and for other occupations it is -0.81%.
The results suggest that rectifying inequitable wage disparities without adverse employment effects requires policies such as negative tax rates that raise incomes for low-wage workers without increasing costs to employers.

Resource Details (Export Citation) GTAP Keywords
Category: 2022 Conference Paper
Status: Not published
By/In: Presented during the 25th Annual Conference on Global Economic Analysis (Virtual Conference)
Date: 2022
Version: 1
Created: Rimmer, M. (4/14/2022)
Updated: Rimmer, M. (5/31/2022)
Visits: 588
- Model extension/development
- Other data bases and data issues
- Labor market issues
- North America

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