Gender Inequality in the Aftermath of Negative Trade Shocks: Evidence from the U.S

We study the differential post-layoff responses in labor market outcomes for men vs. women when unemployment is caused by international trade. Our paper is the first to capitalize on the richness and unique design of the U.S. Trade Act Participant Report database (in combination with the Trade Adjustment Assistance dataset) in order to analyze gender differentials. The analysis identifies trade-affected workers as an overlooked and vulnerable group with very pronounced gender gaps in earnings. Three main results stand out from our estimates. First, we find that the pre-layoff wage gap between men and women who have lost their jobs due to trade is very wide; a striking 30% premium for men, even after controlling for education, experience, race, and other demographic characteristics. Second, we establish that the success rate in finding employment for women who have been laid off because of trade is not significantly lower as compared to men, however we do observe significant differences across some states and some sectors. Third, our estimates reveal that the pre-layoff wage premium for men is completely eliminated upon re-employment. However, we attribute this result to wage compression. Finally, our data enable us to document a series of gender-related outcomes across demographic characteristics, retraining choices, geography, and sectors.