Absence of conflict of interest.
Citation
Reynolds, K. M., & Palatucci, J. S. (2012). Does trade adjustment assistance make a difference? Contemporary Economic Policy, 30(1), 43-59. [TAA with training versus TAA without training]
Highlights
- The study’s objective was to examine the impact of Trade Adjustment Assistance (TAA) on the employment and earnings of participants displaced from jobs in the manufacturing sector who did and did not receive training services through TAA. The authors investigated similar research questions in another study examining the impact of TAA services relative to no TAA services, the profile of which is available [here].
- The study uses a nonexperimental design to compare the outcomes of TAA participants who received job training and other program services with outcomes of a comparison group of participants who obtained a training waiver but received other forms of program assistance. Data for program participants were based on U.S. Department of Labor Trade Act Participant reports.
- The study found statistically significant relationships between receiving job training through the TAA program and employment and earnings when compared with participants who obtained a training waiver but received other forms of program assistance.
- The quality of causal evidence provided in this study is low because the study uses a nonexperimental design, and the authors did not demonstrate that the groups being compared were similar before the intervention. This means we are not confident that the estimated effects are attributable to TAA; other factors are likely to have contributed.
Intervention Examined
Trade Adjustment Assistance (TAA)-Funded Training
Features of the Intervention
TAA is a federal program that provides occupational training and job search assistance for displaced workers. Participants also have access to supportive services, including financial assistance, a health coverage tax credit, and relocation assistance to pursue employment in areas with greater employment opportunities. Participants must have completed or be enrolled in training or have received a waiver from training because they are nearing retirement, have poor health, or already have marketable skills to receive financial assistance (26 additional weeks of unemployment insurance). To be eligible for assistance, workers must have been employed by a company that was certified by the U.S. Department of Labor as having been negatively impacted by trade activity, including production losses because of increased imports.
Features of the Study
The authors used statistical models to compare the employment and earnings outcomes of two subgroups of program participants: a treatment group that received job training and other program services and a matched comparison group that obtained a training waiver but might have received other program services. The authors selected the comparison group using a statistical procedure (propensity score matching) that matched comparison group members to treatment group members based on age, education, job tenure, state, year, and industry characteristics. People in both groups had been displaced from a manufacturing job from 2003 to 2005.
Data for program participants were drawn from U.S. Department of Labor Trade Act Participant reports. The sample includes 5,125 TAA participants. The sample is about 56 percent male with average age of about 47; program participants had an average of 9.5 years of tenure at the job from which they were displaced. About 78 percent of TAA participants received job training, and more than 90 percent of TAA participants who did not receive training received a waiver.
Findings
Employment
- The study found a statistically significant relationship between the employment of TAA participants who received job training and other program services compared with the employment of participants who did not receive training but received other forms of program assistance. Those who received training were about 10 percent more likely to be reemployed than those not receiving training.
Earnings and wages
- The study found a statistically significant relationship between the earnings of program participants who received job training and other program services compared with the earnings of participants who did not receive training but received other forms of program assistance. Those who received training reduced their wage loss by about 9 percent when compared with those who did not receive training.
Considerations for Interpreting the Findings
The authors did not account for existing differences between the groups before participation in TAA. Any existing differences between the groups—and not the program or intervention—could explain the observed differences in outcomes.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the study uses a nonexperimental design, and the authors did not ensure that the groups being compared were similar before the intervention. This means we are not confident that the estimated effects are attributable to TAA; other factors are likely to have contributed.
Additional Sources
Reynolds, K., & Palatucci, J. (2008). Does trade adjustment assistance make a difference? Unpublished manuscript.