International Trade and Worker Displacement: Evaluation of the Trade Adjustment Assistance Program

Policy Watch: Trade Adjustment Assistance

“…During this period, the characteristics of qualifying workers also changed. In contrast to research on the 1970s, Decker and Corson (1995) found that in the 1980s TAA recipients predominantly lost their jobs due to plant closings and were therefore not likely to be recalled by their previous employer. They also found that these workers had longer spells of unemployment and often had bigger drops in reemployment wages relative to their previous jobs than other workers who exhausted their unemployment insurance benefits.…”

“…Addison and Portugal (1989) find that a 10 percent increase in the duration of unemployment may lower reemployment wages by 1 percent. Decker and Corson (1995) find that the training provided through trade adjustment assistance does not seem to increase reemployment wages. While Marcal (2001) also fails to find evidence that training increased reemployment wages, she finds some evidence that trainees had higher employment rates relative to recipients not in training and to those who have exhausted unemployment insurance benefits.…”

“…Since 1975, for example, almost 30 percent of TAA workers had been employed in motor vehicles (although this fraction was much lower in the 1990s) and 20 percent in apparel and textiles (35 percent in the 1990s), but these groups together represented less than 2 percent of workers in 2001, and motor vehicles and apparel represented only 20 percent of the value of imported goods in 2002. Table 2 shows that TAA recipients in 1990 -2000 were disproportionately female, less educated and older, and Decker and Corson (1995) find that they were more highly paid than other unemployed workers. Magee (2001) finds that unionized workers and those displaced by trade from less-developed countries were more likely to have their TAA petitions approved.…”

The Jobs Potential of a Shift Towards a Low-Carbon Economy

“…This programme operates in a national context where general programmes for displaced workers are modest as compared to most other OECD countries. The TAA has been subject to considerable evaluation, although the constant evolution of the programme means that many past evaluation results are now of questionable relevance (Baicker and Rehavi, 2004;Decker and Corson, 1995;GAO, 2001;OTA, 1987). Some of the services it has provided have been innovative and shown high returns (Jacobson et al, 2005), but others have not.…”

Policies for Displaced Workers: An American Perspective

“…Combined benefits under RTAA are capped at $12,000 over a period of up to two years. Decker and Corson (1995) evaluate the marginal effects of significant TAA expansions instituted in 1988, during a period of major displaced-worker policy innovation. They use samples from before and after the 1988 changes in a quasi-experimental evaluation design.…”