Sticky Feet

How do labor market frictions shape the impact of international trade on jobs and wages? This report provides a comprehensive analysis of labor mobility costs and their impact on trade liberalization, focusing on developing countries. It's for policymakers, economists, and international development professionals seeking to understand the complex dynamics between trade and labor markets. Discover how 'sticky feet'—labor market frictions—affect worker decisions, employment reallocation, and wage adjustments. Explore the consequences of trade reforms, including foregone welfare gains and the disproportionate burden on workers. Learn how mobility costs vary across industries, firm types, and worker demographics. Understand the role of informal employment and the impact of plant closings. Gain insights into effective policy interventions to mitigate negative short-term consequences and facilitate labor adjustment. This insightful study offers evidence-based strategies to maximize the benefits of trade while supporting worker transitions, leading to more inclusive and sustainable economic growth.