Ongoing Research Projects:

1) Integrating Capital-Skill Complementarity and Labor Statistics for 22 U.S. Occupations into the GTAP Framework, with Marinos Tsigas, Meryem Demirkaya, and Huyen Nguyen

We utilize recent U.S. labor statistics for 22 different occupations, sourced from the U.S. Bureau of Labor Statistics and the U.S. Department of Agriculture, to disaggregate U.S. labor data into these occupations within the GTAP database. Additionally, we introduce a modified specification for primary factor demands, specifically incorporating the capital-skill complementarity mechanism into the GTAP model. This adjustment allows for different labor-capital substitution elasticities between unskilled and skilled labor, better reflecting realistic labor market features. The model can estimate the impact of trade policy changes on wages and employment across different U.S. occupations.

2) Incorporating Labor Transition into a CGE Model Framework -- a U.S.-China Economic Decoupling Scenario, with Erwin Corong, Hans Lofgren, Maryla Maliszewska, and Dominique van der Mensbrugghe

We enhance the standard static GTAP model (Corong et al. 2017) by incorporating labor market segmentation, drawing on insights from a labor transition matrix for Mexico. This matrix, rooted in historical data, reflects that, in Mexico, labor is more likely to move across certain sectors than others.  We apply this model to explore the impact on Mexico of a potential economic decoupling between the United States and China, comparing simulation results with the standard GTAP model with full labor mobility and with our enhanced model version with segmented labor markets.  Stylized simulation results indicate that while differences in trade, output and macroeconomic effects are generally modest between the standard GTAP model and our enhanced version, significant disparities emerge in wage and employment outcomes.