Citation
Heinrich, C.J., and Mueser, P. (2014). Training program impacts and the onset of the Great Recession. Columbia, MO: Department of Economics, University of Missouri-Columbia, unpublished. [TAA sample]
Highlights
- The study’s objective was to examine whether participation in the Trade Adjustment Assistance (TAA) Program services increased participants’ earnings and, if so, whether those gains were greater during a recessionary period than in periods before and after the recession.
- The authors analyzed administrative data to compare the quarterly earnings of TAA participants with those of a matched comparison group that received Wagner-Peyser Employment Services (ES). The study presented impacts separately by gender and program year.
- The study found that males and females who received services through the TAA Program earned less, on average, than the comparison group during almost all of the 16 follow-up quarters examined. This held regardless of whether the participants began receiving services before, during, or after the recession.
- The quality of causal evidence presented in this report is moderate because it was based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to services received through the TAA Program, but other factors might also have contributed.
Intervention Examined
The Trade Adjustment Assistance (TAA) Program
Features of the Intervention
Established under the Trade Act of 1974 and amended through the Trade Adjustment Assistance Reform Act of 2002, the TAA Program was intended to provide aid to adult workers (18 and older) within an industry or group whose employment had been lost or reduced as a result of foreign trade competition. The available services included employment and case management services, job search assistance and allowances, training, relocation allowances, and some cash income supports. Eligible employees must have lost their jobs or have been notified of unemployment risk because of import competition or shifts in foreign production.
Features of the Study
The treatment group included workers who participated in TAA Program services in Missouri from July 2007 to June 2010. The authors used a statistical technique called propensity-score matching to create a comparison group of workers who received ES services, which included job search assistance. Those selected for the comparison group were as similar as possible to the treatment group on demographic characteristics and previous earnings history. The resulting sample included 2,914 treatment group members and matched comparisons.
The authors used TAA and ES administrative data and wage/earnings data from Missouri’s Department of Labor and Industrial Relations. They estimated differences in quarterly earnings between the treatment and comparison groups after adjusting for demographic characteristics and pre-program employment and earnings history. The study presented results by gender and program year.
Findings
- Males and females who received services through the TAA Program earned less, on average, than the comparison group during almost all of the 16 follow-up quarters examined. This held regardless of whether the participants began receiving services before, during, or after the recession.
Considerations for Interpreting the Findings
The authors included in the treatment group participants who had received any TAA services. About half of them received occupational and on-the-job training. The authors concluded that even though the opportunity costs of participating in a training program might be lower during a period of high unemployment, the benefits of training did not seem to outweigh those costs. They suggested that training programs for this population of workers might not provide them with marketable skills. They also noted that the results from Missouri, where the effects of the recession were greater and the recovery slower than in other states, might not be representative of the United States as a whole.
Causal Evidence Rating
The quality of causal evidence presented in this report is moderate because it was based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to the TAA Program services, but other factors might also have contributed.