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Increases in Local Unemployment and the Delivery of Trade Adjustment Assistance Services

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  • Justin Barnette
  • Jooyoun Park

Abstract

This study investigates how service delivery of employment-related federal programs administered at American Job Centers (AJCs) changes as local unemployment increases. The authors analyze the impact of such changes on labor market outcomes of program participants using data for the Trade Adjustment Assistance (TAA) participants. The authors find that the demand for TAA services increases substantially when local unemployment increases. A 5% to 10% increase in unemployment raises training enrollment through the TAA program by nearly 13 percentage points and increases participation duration by more than 9 weeks. Our results do not support the concern that a sudden rise in the demand for AJC services might deteriorate the quality of service delivery and outcomes. In fact, although increases in local unemployment are generally harmful to displaced workers, occupational training during this time is effective at reducing the size of wage loss by at least 46%, resulting in a 3.4% average increase for wage replacement rates.

Suggested Citation

  • Justin Barnette & Jooyoun Park, 2017. "Increases in Local Unemployment and the Delivery of Trade Adjustment Assistance Services," Economic Development Quarterly, , vol. 31(1), pages 3-24, February.
    • Handle: RePEc:sae:ecdequ:v:31:y:2017:i:1:p:3-24
    DOI: 10.1177/0891242416664782
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    References listed on IDEAS

    as
    1. Jooyoun Park, 2012. "Does Occupational Training by the Trade Adjustment Assistance Program Really Help Reemployment? Success Measured as Occupation Matching," Review of International Economics, Wiley Blackwell, vol. 20(5), pages 999-1016, November.
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    Cited by:

    1. Barnette, Justin & Park, Jooyoun, 2019. "Skill and Wage Overshooting in Occupational Training with the Trade Adjustment Assistance Program," MPRA Paper 93412, University Library of Munich, Germany.
    2. Justin Barnette & Jooyoun Park, 2021. "Skill Overshooting in Job Training With the Trade Adjustment Assistance Program," Economic Development Quarterly, , vol. 35(2), pages 141-156, May.

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