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Series # :
  ETAOP 2013-09
 
Title :
  The Benefits and Costs of the Trade Adjustment Assistance (TAA) Program Under the 2002 Amendments
 
Release Date :
  January 18, 2013
 
 
Abstract :
 

The Trade Adjustment Assistance (TAA) program aims to help trade-impacted workers obtain reemployment at a suitable wage by providing training and temporary income support, among other services.  This report presents the findings of a benefit-cost analysis of the TAA program as it operated under the 2002 amendments.  The analysis compared estimated benefits in dollar values to estimated costs, using estimates from the impact analysis of the program conducted as part of a comprehensive evaluation of the TAA program.  Given TAA’s focus on training and reemployment, one of the most important potential benefits measured was the increased output of participants as quantified by their total compensation (earnings and fringe benefits).  Other benefits included reduced use of training and reemployment services not funded by TAA and reduced receipt of Unemployment Insurance (UI) and public assistance benefits.  Costs of TAA were measured as program outlays for Trade Readjustment Allowances, training, relocation and other allowances, Health Coverage Tax Credits, wage supplements for re-employed older workers, and administration.  Subtracting the costs from the benefits provided a measure of the net benefits of the 2002 TAA.

Net benefits per participant were found to be negative from all perspectives examined:  that of society as whole, participants only, or society except for participants.  These results were driven by the long period during which participants were in the TAA program and not working.    Also, when participants went back to work, their hourly wages were substantially lower than their matched comparisons.  Researchers also found, however, that if TAA made even a relatively modest contribution to the ease of enacting free-trade policies, the program’s benefits could outweigh its costs.



Publication Author(s)
1.
Mathematic Policy Research
 
Author(s):
  • Sarah Dolfin
  • Peter Z Schochet
Full Text Document(s)
Additional Information

Hard copy available: No