When there is a problem in the economy, how do workers respond? “Traditional economists tend to think that if a factory shuts down, its workers simply move elsewhere,” Professor Sharon Traiberman says, “but there has been a sentiment in the public that that’s not true, and data is backing that up.”
Traiberman has been passionate about how workers navigate the economy ever since he was a teenager growing up in Saint Louis, the son of Russian Jews who immigrated from the Soviet Union when anti-Semitism was rife and the Soviet government allowed Jews to leave for Israel, where Traiberman was born. Traiberman’s father was lucky. He was a computer programmer in the 80s, right when the telecommunications industry experienced great growth, and he was willing to be mobile. The family moved from Israel to Canada to the America, where they lived in various states. Traiberman made friends with other immigrants, and believes that this made him more attuned to the power of globalization.
Traiberman now realizes that his father benefited in the 80s from what eludes many people today: the right skills in a shifting economy. Traiberman’s doctoral thesis at Princeton University, “Occupations and Import Competition” (published in the American Economic Review), shows the importance of job-related skills that workers develop, and how changing occupations can be costly. If a factory closes and a machinist becomes an Uber driver, his job-specific experience becomes meaningless. He will suffer financially. “These experience-costs,” Traiberman says, “can help explain both why workers are reluctant to adjust to trade ‘shocks,’ as well as explain why some workers have gained, while others have lost, over the last few decades of globalization.” In other words, it’s not always easy to change jobs.
This has been understood for some time, but quantifying what happens to workers when their experiences and skills are no longer marketable is a difficult task. After all, there are many theories and stories for why workers struggle to adjust to globalization: it could be that some workers just do not have the skills for the modern economy; it could also be that finding jobs in all new industries or places is particularly difficult; or it could be psychological, with some workers struggling in different environments. All these stories point to different policies for us to consider. Traiberman is an empiricist and he blends models and data to try and account for these possibilities at once: how people change jobs within an industry, how industries change in response to the economy, and how to capture the way workers differ in their ability to perform different jobs, both when they begin their careers and as they accumulate experience.