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DOES TRADE ADJUSTMENT ASSISTANCE MAKE A DIFFERENCE?

Authors

  • KARA M. REYNOLDS,

    1. Reynolds: Association Professor, Department of Economics, American University, Washington, DC 20016. Phone (202) 885-3768, Fax (202) 885-3790, E-mail Reynolds@american.edu
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  • JOHN S. PALATUCCI

    1. Palatucci: Student, Department of Economics, American University, Washington, DC 20016. Phone (202) 885-3768, Fax (202) 885-3790.
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    • The authors thank participants of American University's Department of Economics Seminar and anonymous referees for helpful suggestions.


Abstract

The U.S. Trade Adjustment Assistance (TAA) program provides workers who have lost their jobs due to increased trade with income support and training, job search, and relocation benefits. This paper uses data collected by the Department of Labor on TAA beneficiaries to provide the most recent econometric evaluation of the effectiveness of the TAA program. Summary statistics suggest that the TAA program successfully targets displaced workers who have a greater difficulty finding new employment. However, using propensity score matching techniques we find that while the required training component of the program improves the employment outcomes of beneficiaries, on average the TAA program has no discernible impact on the employment outcomes of the participants. (JEL F16)

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