Trade-Related Job Loss and Wage Insurance : A Synthetic Review

The paper seeks to promote further integration of empirical and theoretical discussions of trade and worker adjustment. From the author's recent studies of the costs of job loss, she develops a set of stylized facts of trade-related job loss, with a focus on worker characteristics and labor market consequences. These stylized facts are relevant to any (credible) model of trade liberalization and adjustment costs. The author discusses the basic ideas of wage insurance and summarizes the few data known about how a program might work if implemented in the United States. A final section provides a list of issues for a model of trade that will be consistent with the empirical stylized facts, and sets out questions for future research