Compensating workers who are displaced by trade provides a key political tool for advancing the cause of free trade. Since 1962 the United States has provided such compensation through Trade Adjustment Assistance. Throughout much of the program's relatively short life, there has been much criticism of its effectiveness. However, converting the program to one that provides earnings insurance rather than income replacement would greatly improve the program by providing strong incentives to find work.
Major Themes in Economics
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"Trade Adjustment Assistance: Past Issues, Current Concerns, and a Possible Solution,"
Major Themes in Economics: Vol. 2
, Article 7.
Available at: https://scholarworks.uni.edu/mtie/vol2/iss1/7