Does Occupational Training by the Trade Adjustment Assistance Program Really Help Reemployment? Success Measured as Occupation Matching

Authors

  • Jooyoun Park

    Corresponding author
    1. Department of Economics, College of Business, Kent State University, USA
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    • The author appreciates the helpful comments of Jeffrey Smith, Alan Deardorff, Kenneth Troske, Chris Jepson, Amy Glass, Katherine Schmeiser, J.Z. Garrett, and participants of the Recovery and Reemployment Research Conference and the KAEA session at 2012 ASSA meeting. This paper is partially funded by the Employment and Training Administration of the US Department of Labor. The contents of this publication do not necessarily reflect the views or policies of the department.


Park: Department of Economics, College of Business, Kent State University, Kent, OH 44242, USA. Tel: 330-672-1086; Fax: 330-672-9808; E-mail: jpark8@kent.edu.

Abstract

The Trade Adjustment Assistance Program provides various retraining opportunities to workers displaced due to import competition. This paper investigates whether successful skill acquisition through training—as opposed to general exposure to federal assistance—improves the post-participation outcomes using the Trade Act Participant Report. Success in skill acquisition is indicated by a match between occupations of training and entered employment. The average matching rate for the sample is 37.53%. Trainees with a match display wage replacement rates that are 2 to 3 percentage points higher than those without one, while they display very similar post-participation earnings that are inferior to that of non-trainees. This generally indicates that participants with limited skill sets with lower pre-participation earnings select into training, and successful skill acquisition offsets the negative impacts of their lack of marketable skills. Matching itself does not improve the retention at the job. However, participation in various training programs improves retention.

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