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Policy and politics: Trade adjustment assistance in the crossfire
Author(s) -
Laincz Christopher,
Matschke Xenia,
Yotov Yoto V.
Publication year - 2021
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/caje.12504
Subject(s) - certification , politics , voting , presidential election , globalization , state (computer science) , outcome (game theory) , variety (cybernetics) , presidential system , public administration , business , economics , political science , public economics , market economy , law , computer science , microeconomics , algorithm , artificial intelligence
At a time when trade and globalization are subject to extremely polarized political debates, we study the interplay between politics and the certification outcome of trade adjustment assistance (TAA), a US national policy meant to buffer the domestic labour market from adverse effects of increased international trade. To this end, we capitalize on the unique design, implementation and detailed data collection efforts of the US TAA program. We employ a rich multi‐dimensional data set to quantify the effects of political influence on the TAA certification process, controlling for a variety of fixed effects, in particular at the industry level. We find that political factors such as party affiliation of the president, congressional voting outcomes at the state and district levels and whether a petition was filed in a presidential election year influence the TAA certification probability as well as the decision time.