Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300495 
Year of Publication: 
2024
Series/Report no.: 
Staff Report No. 1105
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
Wage insurance provides income support to displaced workers who find reemployment at a lower wage. We analyze wage insurance in the context of the U.S. Trade Adjustment Assistance (TAA) program by merging linked employer-employee Census data to TAA petitions and leveraging a discontinuity in eligibility based on worker age. Wage insurance eligibility increases short-run employment probabilities and leads to higher long-run cumulative earnings. We find shorter non-employment durations largely drive increased long-term earnings among workers eligible for wage insurance. Our results are quantitatively consistent with a standard non-stationary partial equilibrium search model. The program is self-financing even under conservative assumptions.
Subjects: 
social insurance
displaced workers
regression discontinuity
JEL: 
J6
J65
J01
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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