Administered protection for workers: an analysis of the trade adjustment assistance program

One of the strongest justifications for the existence of the trade adjustme nt assistance (TAA) program is that it reduces workers' lobbying efforts ag ainst trade liberalization. This paper tests the proposition that the gover nment uses TAA to compensate workers for lost tariff protection. Consistent with this argument, a decline in tariffs over the previous year raises wor kers' chances of receiving adjustment assistance in some specifications of the model. Equity and efficiency considerations also affect whether workers receive adjustment assistance. Workers from industries with high tariffs, high unemployment rates, and low wages are more likely to be approved for t rade adjustment assistance. (C) 2001 Elsevier Science B.V. All rights reser ved.