Recent findings suggest the US Trade Adjustment Assistance (TAA) program responds 1.7-3.3 times more effectively than previously estimated, offering insights into redistributing gains from trade integration.
Using petition-level data over 20 years, we demonstrate TAA's responsiveness is significantly higher than earlier studies indicated. However, this support has eroded since the 1990s, coinciding with growing political pushback against economic liberalization in developed democracies.
Our analysis reveals a clear correlation: areas experiencing less responsive assistance showed notably increased voting for Trump in 2016. This underscores the substantial challenge governments face in addressing worker displacement effectively, particularly as economic integration intensifies.
| How Responsive is Trade Adjustment Assistance? was authored by Sung Eun Kim and Krzysztof Pelc. It was published by Cambridge in PSR&M in 2021. |
