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Negative Trade Shocks and Gender Inequality: Evidence from the USA

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  • Ishan Ghosh
  • Mario Larch
  • Irina Murtazashvili
  • Yoto V. Yotov

Abstract

We study the differential post‐layoff responses in labour market outcomes for men versus women when unemployment is caused by international trade. We capitalize on the richness and unique design of two US Trade Adjustment Assistance (TAA) datasets to analyse gender differentials in wages and employment. Three main findings stand out from our analysis. First, the pre‐layoff wage gap between men and women who have lost their jobs due to trade and enter the TAA programme is very wide: a 31.5% premium for men, even after controlling for a series of demographic characteristics. Second, the success rate in finding employment for women who have been laid off because of trade is similar to the rate for men, with significant differences across states and sectors. Third, the pre‐layoff wage premium for men is completely eliminated upon re‐employment. However, we attribute this result to wage compression. We also document a series of gender‐related outcomes across demographic characteristics, retraining choices, geography and sectors.

Suggested Citation

  • Ishan Ghosh & Mario Larch & Irina Murtazashvili & Yoto V. Yotov, 2022. "Negative Trade Shocks and Gender Inequality: Evidence from the USA," Economica, London School of Economics and Political Science, vol. 89(355), pages 564-591, July.
    • Handle: RePEc:bla:econom:v:89:y:2022:i:355:p:564-591
    DOI: 10.1111/ecca.12410
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