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  5. Wage Insurance and Labor Market Trajectories

AEA Papers and Proceedings

ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)

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Wage Insurance and Labor Market Trajectories

  • Benjamin G. Hyman
  • Brian K. Kovak
  • Adam Leive
  • Theodore Naff
AEA Papers and Proceedings
vol. 111, May 2021
(pp. 491–95)
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Abstract

Wage insurance provides income support to displaced workers who find reemployment at a lower wage. We study the effects of the wage insurance provisions of the US Trade Adjustment Assistance (TAA) program using administrative data from the state of Virginia. The program includes an age-based eligibility cutoff, allowing us to compare earnings and employment trajectories for workers whose ages at the time of displacement make them eligible or ineligible for the program. Our findings suggest that wage insurance eligibility increases short-run employment probabilities and that wage insurance and TAA training may yield similar long-run effects on employment and earnings.

Citation

Hyman, Benjamin G., Brian K. Kovak, Adam Leive, and Theodore Naff. 2021. "Wage Insurance and Labor Market Trajectories." AEA Papers and Proceedings, 111: 491–95. DOI: 10.1257/pandp.20211093

Additional Materials

JEL Classification

  • J65 Unemployment Insurance; Severance Pay; Plant Closings
  • J31 Wage Level and Structure; Wage Differentials
  • H75 State and Local Government: Health; Education; Welfare; Public Pensions
  • R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics