Fixed business costs affect firm participation in domestic and export markets. Recent advances in theoretical and empirical trade literature on heterogeneous firms confirm that fixed costs can prevent firms with low productivity levels to produce and export. Particularly, in industries where these costs are high, the majority of firms struggle to survive, leading to potential substantial effects on the labor market. This paper investigates the effect of reductions in fixed costs on the U.S. labor market using the GTAP firm heterogeneity model, where the U.S. labor data are expanded to twenty two occupations. This extension enriches the labor market analysis as well as provides a venue to investigate the factors determining fixed costs. Particularly, we distinguish between the labor types that are employed to cover fixed costs and variable costs
