IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/0556.html
   My bibliography  Save this paper

Trade Adjustment Assistance under the U.S. Trade Act of 1974: An Analytical Examination and Worker Survey

Author

Listed:
  • J. David Richardson

Abstract

The goals of trade adjustment assistance (TAA) are to ease transition, compensate injury, and bleed political pressure for protectionism. Section I of the paper outlines the economic principles underlying these goals, and their shifting historical importance in the U.S. Sections II and III of the paper discuss the personal characteristics of a representative sample of worker recipients of TAA in 1976, and their labor market success in several subsequent years. Their experience is compared to that of a matched sample of workers receiving standard unemployment insurance (UI) . Comparisons in Section II focus on differences in mean characteristics and experience between the TAA and UT samples, controlling only for whether workers returned eventually to the firm from which they were initially separated. Comparisons in Section III focus on differences between the TAA and UI samples in their ability to recover lost employment and income, using a regression approach that in principle controls for all relevant variables, and not for just one. The most important conclusions of the research are the following. (1) The majority of TAA recipients in 1976 were not permanently displaced, but returned eventually to their former employers. A far greater proportion of UI recipients suffered permanent displacement. (2) Workers receiving TAA had higher incomes on average than their counterparts who received only UI. Their incomes furthermore fell less frequently below the poverty line. (3) TAA recipients nevertheless experienced more frequent and enduring transitional unemployment than did UI recipients, and did not return to their former income level as rapidly. (4) The reasons for conclusion (3) were unclear. It could not readily be explained by differences between the TAA and UI samples in permanence of layoff, generosity of program benefits, age, experience, industry, affluence, economic environment, socioeconomic status, or behavioral responses to any of these variables. Conclusions (1) and (2) are at variance with most previous work on TAA. Conclusion (3) is not, but the traditional explanations for it are those that conclusion (4) rules out.

Suggested Citation

  • J. David Richardson, 1980. "Trade Adjustment Assistance under the U.S. Trade Act of 1974: An Analytical Examination and Worker Survey," NBER Working Papers 0556, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:0556
    Note: ITI IFM
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w0556.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Glenn Jenkins & GRAHAM GLENDAY & JOHN EVANS & CLAUDE MONTMARQUETTE, 1978. "Trade Adjustment Assistance: The Costs Of Adjustment And Policy Proposals," Development Discussion Papers 1978-04, JDI Executive Programs.
    2. Baldwin, Robert E. & Mutti, John H. & Richardson, J. David, 1980. "Welfare effects on the United States of a significant multilateral tariff reduction," Journal of International Economics, Elsevier, vol. 10(3), pages 405-423, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Magee, Christopher, 2001. "Administered protection for workers: an analysis of the trade adjustment assistance program," Journal of International Economics, Elsevier, vol. 53(1), pages 105-125, February.
    2. Graham Glenday & Glenn F. Jenkins, 1984. "Industrial Dislocation And The Private Cost Of Labor Adjustment," Contemporary Economic Policy, Western Economic Association International, vol. 2(4), pages 23-36, January.
    3. Burfisher, Mary E. & Hanson, Kenneth & Hopkins, Jeffrey & Somwaru, Agapi, 2004. "Global Agriculural Reform and U.S. Agricultural Adjustment Capacity," Conference papers 331303, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Breisinger, Clemens, 2005. "Do Markets Care About Ethic Minorities? Evidence From A CGE Model for Northwest Vietnam," Conference papers 331356, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Richard B. Freeman, 1981. "Troubled Workers in the Labor Market," NBER Working Papers 0816, National Bureau of Economic Research, Inc.
    6. Magee, Christopher, 2003. "Endogenous tariffs and trade adjustment assistance," Journal of International Economics, Elsevier, vol. 60(1), pages 203-222, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. C. Michael Aho & Thomas O. Bayard, 1984. "Costs and Benefits of Trade Adjustment Assistance," NBER Chapters, in: The Structure and Evolution of Recent US Trade Policy, pages 153-194, National Bureau of Economic Research, Inc.
    2. Michael W. Klein & Scott Schuh & Robert K. Triest, 2002. "Job creation, job destruction, and international competition: a literature review," Working Papers 02-7, Federal Reserve Bank of Boston.
    3. Roderick Hill, 2010. "The Unenlightening "Economic Enlightenment in Relation to College-going, Ideology and Other Variables"," Econ Journal Watch, Econ Journal Watch, vol. 7(3), pages 337-340, September.
    4. Marco R. Di Tommaso & Stuart O. Schweitzer, 2013. "Industrial Policy in America," Books, Edward Elgar Publishing, number 13749.
    5. Yilmaz Akyüz, 2005. "The WTO Negotiations on Industrial Tariffs : What is at Stake for Developing Countries?," Trade Working Papers 22080, East Asian Bureau of Economic Research.
    6. Jaime de Melo & David Tarr, 2015. "Welfare Costs Of U.S. Quotas In Textiles, Steel And Autos," World Scientific Book Chapters, in: Modeling Developing Countries' Policies in General Equilibrium, chapter 21, pages 451-459, World Scientific Publishing Co. Pte. Ltd..
    7. Coyle, Barry & Chambers, Robert G. & Schmitz, Andrew, 1986. "Economic Gains from Agricultural Trade: A Review and Bibliography," Miscellaneous Publications 319990, United States Department of Agriculture, Economic Research Service.
    8. Harris, Richard G. & Kwakwa, Victoria, 1989. "The 1988 Canada-United States Free Trade Agreement: A Dynamic General Equilibrium Evaluation of the Transition Effects," Queen's Institute for Economic Research Discussion Papers 275215, Queen's University - Department of Economics.
    9. Guido G. Porto, 2008. "Agro-Manufactured Export Prices, Wages and Unemployment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 748-764.
    10. Qingyi Su & Chengwei Zang, 2020. "How Will the Implementation of Zero Tariffs Affect Employment in China?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(2), pages 123-142, March.
    11. Uysal, Pinar & Yotov, Yoto V. & Zylkin, Thomas, 2015. "Firm heterogeneity and trade-induced layoffs: An empirical investigation," European Economic Review, Elsevier, vol. 75(C), pages 80-97.
    12. Carl Davidson & Steven J. Matusz, 2010. "Our Motivation," Introductory Chapters, in: International Trade with Equilibrium Unemployment, Princeton University Press.
    13. J. David Richardson, 1987. "International Coordination of Trade Policy," NBER Working Papers 2293, National Bureau of Economic Research, Inc.
    14. Bacchetta, Marc & Jansen, Marion, 2003. "Adjusting to trade liberalization: The role of policy, institutions and WTO Disciplines," WTO Special Studies, World Trade Organization (WTO), Economic Research and Statistics Division, volume 7, number 7.
    15. John Mutti & Harry Grubert, 1984. "The Domestic International Sales Corporation and Its Effects," NBER Chapters, in: The Structure and Evolution of Recent US Trade Policy, pages 279-320, National Bureau of Economic Research, Inc.
    16. Carlos Casacuberta & Néstor Gandelman, 2012. "Protection, Openness, and Factor Adjustment: Evidence from the Manufacturing Sector in Uruguay," Economic Development and Cultural Change, University of Chicago Press, vol. 60(3), pages 597-629.
    17. Kym Anderson, 2005. "On the Virtues of Multilateral Trade Negotiations," The Economic Record, The Economic Society of Australia, vol. 81(255), pages 414-438, December.
    18. Abdul Azhar & Robert Elliott, 2003. "On the measurement of trade-induced adjustment," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 139(3), pages 419-439, September.
    19. Yener Kandogan, 2003. "On Types of Trade,Adjustment of Labor and Welfare Gains During Asymmetric Liberalizations," William Davidson Institute Working Papers Series 2003-568, William Davidson Institute at the University of Michigan.
    20. Joseph F. Francois, 2004. "Assessing the Impact of Trade Policy on Labour Markets and Production," Economie Internationale, CEPII research center, issue 99, pages 27-47.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:0556. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.