Fixed labor costs


1 comment

  • Avatar
    There is a linear relationship between output, employment and labor income. So any change in output would lead to a change in employment and labor income. However, you could model a fixed employment and labor income scenario by setting your event value to your output change and then set your employment, employee compensation and proprietor income to 0. This effectively says that your direct employment and labor income change will be 0 or fixed. The indirect and induced effects will still have employment and labor income changing.
    Comment actions Permalink

Please sign in to leave a comment.