International Studies Quarterly (2021) 65, 109–121

Trade Competition and Worker Compensation: Why Do Some
Receive More than Others?
SUNG EUN KIM
Korea University
AND

Dealing with the distributional consequences of trade liberalization has become one of the key challenges facing developed
democracies. Governments have created compensation programs to ease labor market adjustment, but these resources tend
to be distributed highly unevenly. What accounts for the variation? Looking at the largest trade adjustment program in existence, the US’ Trade Adjustment Assistance (TAA), we argue that petitions for compensation are largely driven by legislative
attitudes. When legislators express negative views of TAA, individuals in their districts become less likely to petition for, andreceive, compensation. This effect is especially pronounced in Republican districts. An underprovision of TAA, in turn, renders individuals more likely to demand other forms of government support, like in-kind medical benefits. We use roll-callvotes, bill sponsorships, and floor speeches to measure elite attitudes, and we proxy for the demand for trade adjustmentusing economic shocks from Chinese import competition. In sum, we show how the individual beliefs of political elites can be
self-fulfilling.
Enfrentar las consecuencias distributivas de la liberalización del comercio se ha convertido en uno de los desafíos que enfrentan las democracias desarrolladas. Los gobiernos han creado programas de compensación para facilitar el ajuste delmercado laboral, pero estos recursos tienden a distribuirse de manera muy desigual. Cómo se justifica la diferencia? Analizando el programa de ajustes comerciales más grande que existe, la Asistencia por Ajustes Comerciales (TAA) de EE. UU.,
sostenemos que las peticiones de compensación son, en gran parte, impulsadas por disposiciones legislativas. Cuando los legisladores expresan opiniones negativas sobre la TAA, es menos probable que las personas soliciten y reciban compensación
en sus distritos. Este efecto es especialmente pronunciado en distritos republicanos. Una escasez de los beneficios de la TAA,a su vez, representa personas más propensas a exigir otras formas de apoyo gubernamental, como prestaciones médicas similares. Tenemos en cuenta votaciones nominales, patrocinios de proyectos de ley y discursos en las cámaras para medir las
disposiciones de la élite, y representamos la demanda por ajustes comerciales utilizando los impactos económicos de la competencia con las importaciones chinas. En resumen, demostramos cómo las creencias individuales de la élite política pueden
ser autocumplidas.
La gestion des conséquences distributionnelles de la libéralisation du commerce est devenue l’un des principaux défis
auxquels les démocraties développées sont confrontées. Les gouvernements ont créé des programmes de compensation pourfaciliter l’ajustement du marché du travail, mais ces ressources ont tendance à être distribuées d’une manière très inégale.
Quels sont les facteurs responsables de cet écart ? Nous examinons le plus grand programme d’ajustement commercial existant, l’Aide à l’ajustement commercial (TAA) aux États-Unis, et nous soutenons que les demandes de compensation sontlargement motivées par les attitudes législatives. Lorsque les législateurs expriment des avis négatifs sur l’Aide à l’ajustement
commercial, les habitants de leurs districts deviennent moins susceptibles de demander et de recevoir une compensation.
Cet effet est particulièrement prononcé dans les districts Républicains. Une insuffisance de l’Aide à l’ajustement commercial
rend quant à elle les individus plus susceptibles de demander d’autres formes d’aide publique, comme des prestations médicales en nature. Nous nous basons sur les votes par appel nominal, les parrainages de projets de loi et les discours législatifs
pour évaluer les attitudes des élites, et nous représentons la demande d’ajustement commercial en nous appuyant sur leschocs économiques liés à la concurrence des importations chinoises. En somme, nous montrons la mesure dans laquelle lesconvictions individuelles des élites politiques peuvent être auto-réalisatrices.

Introduction
One of the biggest challenges currently facing developed
democracies is how to deal with the unequal gains of international economic integration. The stakes are high: regional variation in exposure to foreign imports has been
associated with a range of negative political and social outcomes (Autor et al. 2017; Ballard-Rosa et al. 2017; Charles,
Author’s note: Sung Eun Kim is an assistant professor of Political Science at Korea University. She specializes in international political economy, with a focus on
the role of information in trade politics. Krzysztof J. Pelc is an associate professor and William Dawson Scholar in the Department of Political Science at McGill
University. His research looks at the politics of international trade rules.

Hurst, and Schwartz 2018; Autor, Dorn, and Hanson 2019).
Governments have created mechanisms to help cushion
their domestic populations from such distributional effects,
with a mixed record of success. The largest and oldest domestic trade compensation scheme ever developed is the US
Trade Adjustment Assistance (TAA) program. Put in placein 1962 by President Kennedy, TAA is now a billion dollar program. In its current form, it is designed to provide
trade-impacted workers with income support, health coverage, and relocation assistance while they complete training
to re-enter the workforce, often in a different industry.
In theory, TAA ought to be the means of reconcilingtwo conflicting government objectives: reaping the benefits

Kim, Sung Eun, and Krzysztof J. Pelc. (2021) Trade Competition and Worker Compensation: Why Do Some Receive More than Others? . International Studies Quarterly,
doi: 10.1093/isq/sqaa090© The Author(s) (2020). Published by Oxford University Press on behalf of the International Studies Association. All rights reserved. For permissions, please e-mail:journals.permissions@oup.com

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KRZYSZTOF J. PELC
McGill University

110

Trade Competition and Worker Compensation: Why Do Some Receive More than Others?

not heard of it.”1 The program’s bureaucratic complexity
has increased the role of state governments that have sought
to provide a range of services that assist workers in getting
through this process. But these programs vary a great deal
from state to state. The National Employment Law Projectputs it bluntly: “Inconsistent and overly technical administration by the U.S. Labor Department and neglect or lack ofexperience in many states impedes those certified for TAA
from taking full advantage of its features.”2 Along the samelines, one TAA-eligible worker at a Maytag factory testified
to Congress: “Maneuvering through the Trade Adjustment
Act and other programs can be like entering a bureaucratic
minefield. [...] The result is that programs are not always uniformly implemented from one area to another.”3 We argue that
elite views account for much of this variation.
Parsing our findings further supports the view of a topdown effect. We break down our analysis, which controls
for the magnitude of the trade shock, by type of petitioner:
tellingly, elite views appear to have the greatest effect on petitions initiated by workers, who are least informed about
TAA, and less of an effect on petitions initiated by unions
and firms, who are likely to be better informed ex ante.
Ideology also matters. As we show, while the effect of elite
attitudes holds intra-party, it is most salient in Republican
districts. Republicans are on average less favorable to TAA,
but they also vary far more in their attitudes than Democratic legislators. Accordingly, we find that Republican attitudes “matter more” for determining whether workers apply
for trade compensation.
We attempt to pin down the underlying mechanismin three more ways in our analysis. First, we test for thepresence of neighborhood effects. We find that legislative
attitudes affect not only the home district, but also neighboring districts, especially when these feature legislators withdifferent TAA attitudes. These findings provide additional
support for a top-down effect, since legislators have less incentive to respond to demands from neighbouring districts.
Second, exploiting the exogenous variation in the congruence between media markets and congressional districts, we
also find that the effects are stronger in high-information
environments, where workers get more information about
their legislators. Third, we probe the informational mechanism by looking to web searches. Search patterns of topics
relating to TAA suggest that individuals in locations with
pro-TAA legislators are more aware of the program, andmore likely to seek further information. We also run aplacebo test on web searches relating to social security toensure that we are not simply picking up demand for all support programs. These tests further bolster our contention
that the design of TAA reinserts politics into the equation:
the views of elites prove decisive for the effectiveness of tradecompensation.
Owing to its size and its long history, the TAA may be theworld’s best laboratory in which to examine governments’ability to compensate those left behind by global integration. But most other developed democracies feature somevariant of the same policy. The European Union, for instance, relies on the European Globalization Adjustment
1
The Economist. Jun 29th 2017. “America’s Programme to Help Trade’s Losers
Needs Fixing.”
2“Getting Certified for Trade Adjustment Assistance: A Guide for Unions,
Workforce Agencies, and Community Groups.” 2005. National Employment Law
Project and International Union, UAW. p. 2.
3
Emphasis added. Statement by David Lee Bevard, “How Effective Are Existing Programs in Helping Workers Impacted by International Trade?” Monday,
March 26, 2007, U.S. House of Representatives. Committee on Education andLabor. Washington, DC. p. 7.

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from trade, while mitigating its distributional effects, andthus decreasing opposition to trade liberalization in the firstplace. And a number of studies provide evidence that TAA
does partly achieve these twin objectives: the anti-incumbent
effect of trade-related job losses is smaller in areas that obtained more TAA funding (Margalit 2011), and information
about TAA increases support for trade among low-income
individuals (Ehrlich and Hearn 2013). But TAA has always
been politically fraught—a program frequently held hostage
in partisan negotiations over fast track authority and the ratification of trade deals. As a result, it is unloved by both sidesof the political spectrum. As we argue, this contention is at
the very source of its mixed record.
In this article, we begin by demonstrating how uneven
the allocation of TAA is across regions: we show that sometrade-exposed areas petition for, and obtain, high levels ofcompensation, while other areas exposed to identical levels of trade dislocation are under-served by the program.
Such unevenness, by itself, is concerning. It leads us to ask,
what factors determine who obtains adjustment assistance?
We look to the views of political elites for an answer. The way
TAA relies on petitions by workers in a low-information environment, we argue, inserts politics back into the equation.
When elites hold a dim view of trade adjustment, individuals
who lose their jobs to import competition are less likely tothink of TAA as a program through which they can successfully obtain support, and they are less likely to petition forcompensation.
In other words, we argue that legislators’ views on
trade compensation are self-fulfilling. When faced withadministratively complex measures in the midst of difficult
circumstances, workers fall prone to the informationaland framing effects generated by the political climate theyfind themselves in. While TAA is meant to be an apoliticalmechanism, we demonstrate that its effectiveness in large
measure depends on the local political environment.
We then point to one way in which this unevenness matters. One worrying recent finding is that areas hit by trade
shocks see large increases in medical benefits and disability
payments that “vastly exceed the expenses of the TAA program” (Autor, Dorn, and Hanson 2013). We show that thisgreater demand for in-kind medical benefits may be due inpart to an underprovision of trade compensation. Elite attitudes about trade adjustment may thus result in unintended
spillover effects on other government transfers, ultimately
creating greater dependence on the state.
To test our expectations, we code the attitudes of legislators towards TAA using three indicators: roll-call votes
on bills concerning the TAA program, (co)sponsorships of
TAA-related bills, and all Congressional speeches that relate
to TAA, on which we run a text analysis. We then use thesemeasures to explain the volume of TAA petitions in a given
area in reaction to trade shocks. The findings support our
main contention: controlling for the magnitude of the trade
shock, areas where elites hold more negative views of tradecompensation see fewer overall petitions, even within political party.
The challenge of the empirical analysis is to demonstratethat variation in TAA is driven by a top-down, rather thana bottom-up phenomenon; that elite views are affecting thelevel of trade compensation, rather than merely reflecting
local economic insecurities. We tackle this challenge in a
number of ways. First, the available anecdotal evidence supports the notion that the key reason why eligible workers
fail to apply is a lack of information. As The Economist magazine recently puts it, “The [TAA] scheme can be confusing
and administratively complex. Worse, most Americans have

S. E. KIM, AND K. J. PELC

111

Fund (EGF) to help trade-impacted workers. That program
faces similar challenges as the TAA, chiefly a lack of information about the existence of the program, which remains
underused.4 In both the US and European case, the result
is the same: compensation of those left behind by trade integration falls prone to politics, in ways that lead to unevenregional allocation of adjustment assistance.

The Political Geography of Trade Adjustment

4
The EGF has seen very uneven use: some countries, like the Netherlands,
rely on it extensively, while others, like the UK, have never availed themselves ofit.
5
U.S. Congress, Office of Technology Assessment, Trade Adjustment Assistance: New Ideas for an Old Program-Special Report, OTA-ITE-346. Washington,
DC: U.S. Government Printing Office, June 1987.

Figure 1.
Republican-leaning states (red dots). Yet, there remains considerable variation in the level of TAA petitions within areas
with similar partisan orientation. Next, we discuss how thepolitical divide across and within the parties generates the
top-down effects by shaping individual workers’ decision to
apply for TAA.
The Political Divide over TAA: Ideology and Beyond

TAA represents a political compromise, and this has effects both on its design and its outcomes. Republicans often
question its purpose, while Democrats would like to see a
broader set of measures to support all workers who have losttheir jobs, whatever the proximate cause. Back in 1962, TAA
was put forth as an integral part of the Trade Expansion Act,and while it remains a program with traditional bipartisan
support, what both sides of the aisle see as its second-best
character makes it vulnerable to horse-trading. As Burgoon
and Hiscox (2000, 3) put it, “[TAA] tends to be extremely
popular in theory (among voters as well as among scholars),
but difficult to establish and maintain in practice.”
Within the United States, the political debate over thevery need for TAA has never ceased. Some argue that governments have a responsibility to ensure that those negatively affected by federal trade policy be compensated forchanges that they had no part in. Others claim that because liberalization amounts to a roll-back of special favors
to vested interest groups, no compensatory measure is required.6 The difference in opinion comes down to beliefs
about what is being righted: the labor dislocation resulting
from federal trade policy, or the rent-seeking protection thatliberalization lifts in the first place.
Beyond this ideological divide, TAA has proven highly
prone to legislative vote trading. Republicans have threatened to block trade agreements they otherwise supportedwith South Korea, Panama, and Colombia over the TAA
benefits tied to those agreements, which they considered
overly generous. Democrats, in turn, have also voted against
TAA when trying to derail the delegation of “fast track” tradeauthority to the President. As for labor unions, while they
support TAA on its face, they regularly push back against
it, since they see it as both accelerating liberalization, andfacilitating the move of workers to less unionized industries.
Tellingly, union leaders regularly refer to TAA as “burial
insurance” (Kletzer and Rosen 2004, 5). In other words,
6
CATO Institute. Sallie James. “The Flawed Logic of Trade Adjustment Assistance.” June 2, 2011.

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TAA is designed to compensate workers who have lost theirjobs to trade competition, but TAA benefits are not automatically disbursed to all such trade-impacted workers. The
first step toward receiving benefits is to apply for eligibility
certification. To be certified, a worker must demonstrate to
the Department of Labor (DOL) that (i) a significant number of workers in the firm have become or are threatened
to become totally or partially laid off; and (ii) imports or ashift in production to a foreign country are a major factor
contributing to these layoffs and to a decline in sales or inproduction. The DOL reviews each application and determines eligibility.
Given these eligibility criteria, the prevalence of TAA petitions in an area is considered a good proxy for tradeinduced labor market shocks. And because location information is available for each application, TAA petitions haveoften been used as a geographic measure of trade exposure (e.g., Uysal, Yotov, and Zylkin 2015; Monarch, Park, andSivadasan 2017; Dean 2018). But while the two are highly
correlated, there exists considerable variation in TAA petitions across space and time that cannot be explained bytrade shocks. For instance, Kondo (2018, 181) notes that inthe 2000s, the commuting zone (CZ) surrounding Gaston in
North Carolina was in the top-20 of TAA petitions, but did
not even make it into the top-100 zones according to importpenetration measure. By contrast, the nearby CZ surrounding Catawba, also in North Carolina, was in the top-20 areas
on both import penetration and TAA petitions. This mismatch has long been known. As a 1987 Congressional reportconcluded in its assessment of the program, “there is no reason to believe that TAA certifications accurately reflect thegeographic or industrial distribution of trade-affected workers.”5 In this article, we set out to explain what accounts forthis mismatch: Why do some areas appear to benefit fromfar more trade compensation than others? The answer, wesuggest, is politics.
As a rough first illustration of the role of politics, figure 1
plots the annual average percentage of workers covered by
TAA petitions in the 2000s against the level of Chinese import penetration for each CZ (we discuss both measures ingreater detail in the next section) in Democratic-leaning versus Republican-leaning states, proxied by Democratic versus Republican governors. Figure 1 shows a positive association between import exposure and TAA petitions for both
Democratic and Republican-leaning states, but it also illustrates how CZs exposed to identical levels of imports per
worker vary significantly in the amount of TAA support theyreceive. This variation is in part explained by the partisanorientation of areas: CZs in Democratic-leaning states (bluedots) see a higher level of TAA petitions than the ones in112Trade Competition and Worker Compensation: Why Do Some Receive More than Others?

support and condemnation of the program are often strategic, and linked to other issues (Burgoon and Hiscox 2000).
In the face of such disagreements, the emergence andcontinued existence of TAA reflect pragmatic concerns thatcut across simple partisanship. In this view, the overarching purpose of trade compensation is to decrease domestic
opposition to trade agreements. Because import-competinggroups tend to be politically powerful, governments find it
necessary to extend some credible promise of compensation
to ratify trade deals. Findings thus show that Republican
legislators, traditionally opposed to government assistanceprograms, tend to support TAA programs when a large portion of their constituents stands to gain from trade (Rickard2015).
In figure 2, we show relationship between partisanshipand TAA attitudes within-party: specifically, we measure therelation between a district’s Democratic vote share and its
legislator’s pro-TAA vote (the measure of which we describe
in the next section), over the range of the data, separating
Republican victories from Democratic ones. Each dot represents a sample average within a given bin. Figure 2 offers a
few takeaways: first, the average stance of Democratic legislators is indeed more favorable to TAA than that of Republicans. Second, there is substantial within-party variation ofviews towards TAA, and this variation is much wider within
the Republican Party. These points prove relevant to the remainder of our analysis.
Political Elites, Information, and TAA Petitions

Our central theoretical expectation is that this variation in
elites’ political attitudes towards trade adjustment accounts
for the highly uneven distribution of TAA benefits in areas exposed to the same trade shock. When legislators holda dim view of trade adjustment, we expect that workers
in that legislator’s district will be less likely to know about
the program’s existence, and less likely to successfully jump
through the required hoops to secure benefits. Specifically,
we focus on two mechanisms through which the views of political elites affect workers’ decisions in applying for TAA:
(1) information and framing effects; and (2) the amount ofadministrative support provided to workers.
First, we expect that legislators who are more (less) supportive of TAA as a policy are more (less) likely to provide
information about TAA to displaced workers and in a morepositive (negative) light. In turn, individuals exposed to theviews of pro-(anti-) TAA legislators, either directly or indi-

7
Individuals can acquire information disseminated by legislators through direct contacts with legislators, local news coverage, online communication by legislators, or through other constituents who acquired information through aforementioned channels.
8
Cited in: “Aid for Trade”. July 1st 2017. The Economist.
9
ibid
10
Interview materials with authors.
11
Press Release, September 20, 2011. “In Speech, Hatch Outlines Opposition
to Trade Adjustment Assistance Legislation.”
12
Press Release, June 12, 2015. “Opposing TAA (Trade Adjustment Assistance) and Increasing Trade Transparency.”

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Figure 2.

rectly through co-workers, neighbors or friends, would be
more (less) willing to apply for the program.7 Our positedmechanism, centered around elite-provided information,builds on the findings that information environment created by political elites influence the way individuals think
about policy issues in general (Zaller 1992; Broockman andButler 2015) and specific economic issues including international trade or austerity (Ardanaz, Murillo, and Pinto 2013;
Barnes and Hicks 2018).
We contend that individuals are particularly prone to theinformation and framing effects with respect to TAA due tothe low-information environment where they have little exante knowledge about the existence and the effects of TAA.
TAA caseworkers, tasked with assisting workers through thepetitioning process, speak to this information problem. As
one such TAA caseworker from Indiana described it, TAA
can be the opportunity of a lifetime, but “they [laid off workers] have to want it.”8 And wanting it may not be enough,if workers aren’t aware of the program’s existence. As the
Economist magazine puts it, “most Americans have not heard
of [TAA].”9 A labor liaison to the American Federation ofLabor and Congress of Industrial Organizations that we
spoke to confirmed that when it comes to trade adjustment,“people don’t know what they don’t know,” and recounted
cases of workers who were in retraining programs without realizing that they would have been TAA-eligible, andmight have gotten $20,000 in income support during theirretraining.10
In such a low-information environment, the role of political elites can be critical in encouraging or discouraging
workers from applying for trade compensation. Legislators
opposed to TAA are not likely to provide much informationon the presence of TAA to their constituents. If any information is provided, it is likely to be a discouraging. Consider Senator Hatch of Utah, who has argued, “there is little
evidence that the TAA programs actually work. In fact, theopposite is true [...] the TAA program has no discernible
impact on the employment outcomes of the participants.”11
Or Congressman Doug Lamborn of Colorado’s fifth district,
who has claimed, “this bloated, wasteful, and unsuccessfulprogram is a budget-busting handout designed to placate
union activists [...] and that’s why I opposed TAA.”12 This
was the only press release about TAA that Lamborn sent
while serving as a member of the House: the one signal his
constituents would have gotten about TAA was a negative
one. Without any meaningful information on the types of assistance and training available through TAA, we expect thatlaid-off workers in districts like Congressman Lamborn’s areless likely, all else equal, to avail themselves of its benefits.
Such negative or indifferent elite attitudes should act as adeterrent to mounting a petition in a complex application
process.
By contrast, other legislators send strongly favorable information on trade compensation. In a representative instance, former Congressman Bruce Poliquin, who served
Maine’s 2nd district, promptly responded to layoffs at theS. E. KIM, AND K. J. PELC

113

to the attitudes of political elites. The more negative elites’
views are, the less likely individuals will know about, andpetition for, TAA benefits. Anecdotal evidence suggests atleast two inter-related channels through which an elite effect might operate: (1) policymakers opposed to trade adjustment are less likely to bring attention to the program’s
existence and may negatively affect beliefs about the likelihood that the program will actually deliver benefits; and(2) they may withhold direct assistance as intermediaries between workers and the DOL. In other words, because of thedesign of TAA, and how it relies on worker petitions, elite
attitudes have a self-fulfilling aspect: areas where elites view
TAA as ineffective will end up seeing fewer worker-initiatedpetitions for trade adjustment.

13
Press Release, September 10, 2015, “Collins, King, Poliquin Urge Labor
Dept. to Approve Assistance for Displaced Verso Mill Workers.”
14
Press Release, August 12, 2016, “Collins, King, Poliquin Announce Trade
Adjustment Assistance for Displaced Cascades Auburn Fiber Mill Workers.”
15
National Employment Law Project TAA Manual, 2005.
16
Press Release, November 27, 2007. “Hodes Announces Trade Adjustment
Assistance for Groveton Mill Workers.”
17
See supra, fn. 5.

18
The number of CZ-by-district cells ranges from 1,483 in 1990 to 1,513 in
2007, which changes over time due to redistricting. In the case of 2007, 316 out of
722 CZs were contained within a single districts, while the rest of CZs straddled atleast two districts. For illustrations, see Section A1.1 on page A-3 in the Supporting
Information (SI).
19
We leave out roll-call votes on trade or appropriations bills that are only
partially relevant to TAA (e.g., H.R. 2621 Reciprocal Trade Agreement Authorities
Act of 1997 and H.R. 1, the American Recovery and Reinvestment Act of 2009.

Data and Empirical Strategy
To test the elite effect on trade compensation, we bring politics into the equation of TAA applications: we measure legislators’ views about trade adjustment and test their effecton the rate of TAA petitions in the face of trade shocks. In
other words, we keep the economic shock constant, but vary
the political environment. We measure import penetration
at the CZ level, while congressional districts are the key political geographical unit that we are interested in. As CZs often straddle two or more districts, we spatially merge mapsof CZs and districts and take CZ-by-district as our geographical unit of analysis, at which level we construct our data on
trade compensation.18
Measuring Trade Compensation

The dependent variable of our analysis is the intensity of
TAA applications measured at the CZ-by-district level. We
obtained data on all TAA applications filed between 1990
and 2007, each of which was geo-coded to a latitude and longitude coordinate and then aggregated at the CZ-by-districtlevel. Our dataset aggregates information acquired from36,646 petitions covering 3,225,421 workers. Each petition
includes information about the name of the employer, thepetitioner (e.g., union, state one-stop center, or workers),
the address of the workplace, the application and determination date, the estimated number of affected workers, andthe certification status. We utilize this information to construct the annual number of petitions filed and the annual
number of workers covered by the petitions in each CZ-bydistrict cell.
Measuring Elite Attitudes

We measure elite attitudes toward trade compensation using roll-call voting records, bill sponsorship information,and floor speeches. For roll-call voting records, we examine all House votes on TAA between 1990 and 2007. We
only include major roll-call votes that are consequential tothe direction of the policy, excluding procedural votes. Following Rickard (2015), we consider roll-call votes that are
specific to TAA in order to isolate legislators’ positions on
TAA.19 As votes on TAA are often bundled with other issues,

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Verso Paper Corporation by “urging Verso to file a petition
for Trade Adjustment Assistance, which could provide employment training, income support, and job search assistance to affected workers.”13 When a petition for TAA for
another mill was approved, Poliquin distributed a press release noting that “TAA assistance will help these workers getback on their feet by providing them with the opportunity toacquire the new skills and new training necessary to prepare
for jobs in other industries. It is a crucial lifeline for workers
in Maine and across the nation.”14 Beyond those working
at the mill in question, displaced workers in such a district
are more likely to be informed about TAA and more willing to apply for the program. In short, elite attitudes toward
TAA largely determine the amount and type of information
about TAA available to trade-affected workers.
Second, political elites can also play a more direct rolein the process of trade adjustment by providing administrative support. As one manual for TAA applicants puts it,“The participation of members of Congress can influence
employers, local officials, and others to assist petitioners in
obtaining supporting information for TAA certification.” Asa result, that same manual suggests to applicants, “consider
giving your U.S. Representative and Senators notice whenfiling TAA petitions.”15 This type of coordination can prove
crucial to workers. For instance, the former Congressman
Paul Hodes of New Hampshire’s 2nd district “wrote toLabor Secretary Elaine Chao and requested a swift approvalof the TAA application [by the Groveton Mill].” He also provided detailed information about the program benefits andencouraged workers to call his office for assistance.16 This
type of support becomes more likely when the legislator inquestion is a champion of TAA, rather than an opponent of
the program, who would be less likely to invest in assisting
workers obtain the benefits they may be eligible for. Beyond
shaping information about trade-compensatory programs
and framing beliefs about their effectiveness, politicians
can thus play a direct role in supporting petitions for relief.
This is consistent with Ritchie and You ’s (2019) findingthat direct contacts between legislators and the DOL increase the approval rate of TAA petitions—but even before
the petition is filed, political elites play a crucial role in
the application process by providing direct administrative
assistance to workers. This belief finds support in anecdotal
evidence. The aforementioned 1987 Congressional reportthat claimed that there was “no reason to believe that TAA
certifications accurately reflect the geographic or industrial
distribution of trade-affected workers” also went on to
identify a cause of the mismatch. As it put it, “some states
have done a much better job of outreach than others.”17
There is a rich literature that tries to account for theunder-utilization of various social provisions, from unemployment insurance (UI) and food stamps to college financial aid and family cash assistance (Currie 2004; Hernanz,
Malherbet, and Pellizzari 2004; Hoxby et al. 2013; Sheran
and Swann 2007). Lack of information is a major explanation in each case, and especially for targeted, or meanstested programs. We contribute to this literature by highlighting the prior role of politics. In sum, we argue that
the US approach to trade adjustment is highly vulnerable

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Trade Competition and Worker Compensation: Why Do Some Receive More than Others?
Table 1. Roll-call votes on TAA, 1990–2007

Congress

Vote date

Bill

Vote no.

Summary

Results105

Sep-25-1997

H.R.2267

455

Failed (107-305)

106

Jun-22-2000

H.R.4690

316

107

Dec-6-2001

H.R.3008

477

110

Oct-31-2007

H.R.3920

1025

On the amendment to reduce funds for TAA
program by $90 million
On the amendment to increase funding for
TAA program by $49.5 million.
To reauthorize the TAA program under the
Trade Act of 1974
On passage of Trade and Globalization
Assistance Act of 2007

Measuring Import Penetration

As the intensity of TAA applications is largely determinedby the import shock workers are exposed to, we control for20
We hand-coded 20 percent of the collected documents. The rest aremachine-coded through three supervised learning algorithms (support vector
machine, maximum entropy, and decision trees) using the RTextTools package
in R (Jurka et al. 2013). When the three algorithms returned a different classification for a given text, we manually reviewed and revised the classification. For
details, see Section A2 on page A-5 in the SI.

Agreed to (420-3)
Agreed to (264-157)

the CZ-level import exposure per worker (IPW) by employing Autor, Dorn, and Hanson’s (2013) measure of Chinese
import penetration. They developed the measure by taking
into account of industry-level trade shocks from China andregional industrial specialization across CZs (calculated as
the proportion of workers in a given industry relative toall workers in the CZ). The measure is available at the CZlevel for the years 1990, 2000, and 2007, from which theycalculate the decade-level change. To address a potential issue of endogeneity whereby realized Chinese imports to theUnited States might be correlated with product demand in
the United States, they instrument for Chinese import penetration to the United States using import penetration toeight other developed countries. We follow this approach,which allows us to zero in on the effects of different politicalclimates on TAA applications within the same CZ with thesame degree of economic shock.
Estimation

Based on this collection of information, we estimate the effect of having pro-TAA legislator on TAA applications, while
controlling for the economic shock for each CZ as follows:USˆYi jt = α + β1 I PW
it + β2 Pro-TAA jt + β3 ln(Pop)i jt + i jt ,(1)
where Yijt is the logged number of petitions (or the logged
number of workers included in the petitions), filed in a CZ
i by district j cell in year t. I PWitU S is the level of IPW in
CZ i in the beginning of the decade of year t, for which we
proxy using I PWitOT as an instrumental variable.21 Specifically, we use 1990 values of import exposure for all observations between 1990 and 1999, and values from 2000 for allobservations from 2000 to 2007.22 Pro-TAA is a binary measure constructed for each legislator representing a district j
in year t, that takes the value of 1 if the legislator has cast a
pro-TAA vote, (co)sponsored a pro-TAA bill, or delivered a
pro-TAA speech at least once during the two-year period ofeach Congress, and 0 otherwise. Throughout the analysis,
we control for population (ln(Pop)) for each CZ-by-districtcell.23 All observations are weighted by the CZ-by-district
cell’s share of the district population.
21
I PWitU S denotes the level of import exposure calculated based on Chinese
import penetration to the United States. Its instrumental variable I PWitOT is calculated using Chinese import penetration to eight other developed countries.
22
We do not use the decade-level change in import exposure, since doing sowould amount to explaining the outcome in preceding years with the variable inlater years, given how our dependent variable is coded at the year level.
23
We obtained information on county-level population from Charles, Li, andStephens (2018). We aggregate the county-level population to the CZ-by-districtlevel. When counties are divided into multiple districts, we apportion the population into districts based on their population share in different districts in the

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we have a limited number of TAA-specific roll-call votes asshown in table 1. Only one roll-call was targeted to reduce
funds appropriated for TAA (the vote on the amendmentfor H.R.2267 in the 105th Congress), votes for (against)
which are considered as anti-TAA (pro-TAA). The others
were to reauthorize the program or increase funding for it.
We consider votes for (against) these bills or amendments
as a pro-TAA (an anti-TAA) stance.
We also consider bill sponsorships. A bill has a single formal sponsor, but an unlimited number of legislators can join
the sponsor in support of the legislation. While legislators
are not required to reveal their policy position as in roll-callvoting, they can express their support for the bill by choosing to (co)sponsor it (Rocca and Gordon 2010). We collected information on sponsors and co-sponsors of all TAArelated bills introduced in the House between 1990 and2007. Once again, we focus on those bills that are directly related to TAA, leaving out only partially relevant ones. During
this period, a total of 44 TAA-specific bills were introduced,
and there was at least one bill specific to TAA in every congressional session. A bill had 18.5 co-sponsors on average,
but the number of co-sponsors varies widely, from 0 to 111.
Since every one of these bills aimed to extend or expand
TAA coverage, sponsors and cosponsors of these bills arecoded as having pro-TAA attitudes.
We also examine floor speeches by all members of theHouse during the same period. We collected all remarksby members of the House containing the words “TAA” or“Trade Adjustment Assistance” anywhere in their speeches,
which resulted in a collection of 448 speeches deliveredby 207 legislators. We classified these speeches into proTAA, anti-TAA, and other, using a supervised learning technique.20 Speeches are classified as pro-TAA (anti-TAA) when
legislators express explicit support (opposition) for its expansion or reauthorization. In the majority of speeches(64.5 percent), TAA is only mentioned in passing; thesewere not included in our measuring of elite attitudes. While
press releases are also a useful source of information formeasuring legislative attitudes, we focus on floor speeches
because of the limited availability of press release data forthe period under examination.

Failed (128-284)

S. E. KIM, AND K. J. PELC

115

Table 2. Elite attitudes and TAA applications
(1)

(2)

(3)

(4)

(5)

(6)
(7)
Affected Workers(8)

Petitions

IPW
Pro-TAA

Dem.

Rep.

Full

Full

Dem.

Rep.

Full

0.185**(0.051)0.077**(0.021)0.223**(0.080)0.064+(0.034)0.165**(0.051)0.080*(0.036)

0.359**(0.125)0.208**(0.062)0.455*(0.217)0.150(0.108)0.282**(0.109)0.247*(0.108)Yes
Yes
26,087

Yes
Yes
11,162

Yes
Yes
14,6260.151**(0.053)0.030(0.029)0.060*(0.027)
Yes
Yes
26,087

Yes
Yes
26,087

Yes
Yes
11,162

Yes
Yes
14,626

0.272*(0.133)0.088(0.089)0.155*(0.077)
Yes
Yes
26087

IPW*Pro-TAA
CZ FE
Year FE
Observations

Note: Robust standard errors clustered on CZs in parentheses. Dependent variable is logged number of TAA applications in columns 1–4 and logged
number of estimated affected workers in TAA applications in columns 5–8. All models control for population (logged). All observations are weighted
by the cell’s share of district population. + p < 0.10, * p < 0.05, ** p < 0.01.

Results
Table 2 presents the results. Our dependent variable isthe logged number of TAA applications in columns 1–4, andthe logged number of estimated affected workers includedin the applications in columns 5–8. Beginning with columns
1 and 5, we find that the trade shock (IPW) and the legislative attitudes toward TAA (Pro-TAA) are positively associatedwith TAA applications. We then estimate the same models
separately for the sample of Democratic (columns 2 and 6)
and Republican districts (columns 3 and 7). The results reveal two major differences in the patterns of TAA applications in areas with Democratic versus Republican legislators.
First, TAA petitions are more responsive to the trade shock
under Democratic legislators than Republican legislators.
We know Democratic legislators are generally more in favorof TAA than Republicans, and accordingly, we see a higher
responsiveness of TAA to the trade shock (as seen by the difference in the appendixze of the IPW coefficient in models
6 and 7). Second, the legislator’s attitudes toward TAA has
a larger effect on TAA applications in Republican districts,
which see greater variation in legislators’ preferences toward
TAA. Turning to columns 4 and 8, we add an interaction
term between IPW and Pro-TAA. The positive and statisticallysignificant coefficient on the interaction term suggests that
TAA petitions are more responsive to the trade shock with apro-TAA legislator. Given the identical level of trade shock,areas with a pro-TAA legislator are expected to see 6.0 percent more applications (column 4) and 15.5 percent more
petitioning workers (column 8) than areas with an anti-TAA
legislator.
Testing the Mechanism (i): Who Petitions?

Next, we attempt to further pin down the mechanism. We
begin by separating the effect of elite attitudes on TAA applications, according to who the petitioner was. The DOL
requires that petitions be submitted by a group of at least
three workers (43 percent of petitions in our data), a union(15 percent), a company (35 percent), or a state government agency (6 percent). Among the three main potential
petitioners, we expect workers to be least informed about
the presence of the program. Individual workers should findit costlier to search for information about the program andits effectiveness. They may decide to apply only once theyyear of redistricting. We obtained this population allocation information from theMissouri Census Data Center.

obtain outside information and encouragement. By contrast, the other types of potential petitioners (unions, companies, and state agencies) can be reasonably expected tohave more information about the program, and be capableof filing the petition on their own without encouragement
or assistance from political actors.
Table 3 shows the effects of elite attitudes on petitions according to who initiated them: workers, a union, a company,
or a state agency. The unit of analysis and the estimating
equation are the same as for the models presented above(and thus present the same number of observations); only
the dependent variable varies, according to the petitioner.
All models control for population as above, and include CZ
fixed effects and year fixed effects. Columns 1–4 present theresults for the logged number of petitions, while columns
5–8 consider the logged number of affected workers. As expected, the coefficient for Pro-TAA appears statistically significant for worker-initiated petitions (columns 1 and 5).
The number of petitions filed by workers is on average
6.2 percent higher in the areas with pro-TAA legislators
than the other districts. Similarly, the number of petitioning workers is on average 23.4 percent higher in the proTAA districts than the others. The substantive effects of ProTAA are much smaller on firm- or union-initiated petitions.
In sum, while workers appear most prone to elite effects,
unions and firms appear less affected, in a way consistent
with an informational effect. Again, the robustness of findings to the inclusion of CZ fixed effects underscores the importance of political environment in explaining the patternof TAA allocation, even for areas within the same economic
geography.
The varying effects of IPW also merit further discussion.
According to table 3, petitions from firms appear to be
the most responsive to import shocks, with petitions fromunions least so. There may be a couple of reasons for this.
First, firms are best informed about the causes of layoffs, andmay thus be best able to clear TAA’s requirement for demonstrating that layoffs are due to import competition. Second,
while factories tend to be specific to a CZ, unions, which
often operate nationally, are not. As a result, unions may beless responsive to local shocks: information about the benefits of TAA, and its application process, may be sent acrossthe entire membership, which could then account for why
the CZ-specific effect of IPW is imprecisely estimated.
In addition to the models presented in tables 2 and 3,
we account for factors that may confound the relationshipbetween elite attitudes and TAA applications. First, it could

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Full

116

Trade Competition and Worker Compensation: Why Do Some Receive More than Others?
Table 3. Elite attitudes and TAA applications by petitioners
(1)

(2)

(3)

(4)

(5)

Petitions

IPW
Pro-TAA(8)

Workers

UnionsFirms

StatesWorkers

UnionsFirms

States

0.080**(0.030)0.062**(0.018)Yes
Yes
26,0870.025(0.018)0.027*(0.011)
Yes
Yes
26,0870.138**(0.041)
0.022(0.016)
Yes
Yes
26,0870.052(0.035)0.033**(0.010)Yes
Yes
26,0870.203*(0.085)0.234**(0.064)
Yes
Yes
26,0870.008(0.046)0.048(0.040)Yes
Yes
26,0870.417**(0.117)0.079(0.062)
Yes
Yes
26,0870.168(0.125)0.109*(0.046)
Yes
Yes
26087

Note: Robust standard errors clustered on CZs in parentheses. Dependent variable is logged number of TAA applications in columns 1–4 and logged
number of estimated affected workers in TAA applications in columns 5–8. All models control for population (logged). All observations are weighted
by the cell’s share of district population. + p < 0.10, * p < 0.05, ** p < 0.01.

be that the findings above are driven by prevalent attitudes
over social provisions. A series of empirical studies point
to significant variation in take-up rates of a wide range ofgovernment assistance programs (Currie 2004; Hernanz,
Malherbet, and Pellizzari 2004; Sheran and Swann 2007)
as well as in general attitudes toward government compensation (Lim and Burgoon 2018). One way such attitudes
can manifest is in the stigmatization of social program recipients, which could underlie both elite attitudes toward
TAA and TAA applications. To account for this possibility,
we control for take-up rates of UI, a program that enjoys
high worker awareness, but that is prone to stigma.24 As presented in tables A5 and A6 in the SI, our key coefficients remain almost identical throughout, which suggests that ourfindings on elite influence are not reducible to general attitudes toward social policy.25
We also ensure that our findings are not simply driven
by an area’s partisan orientation by controlling for the twoparty vote share of Democratic candidates in the previous
House elections. Union density is another factor that may
account for the variation in TAA applications. Unions arewell informed about the TAA process, they can file a petition on behalf of workers, or provide administrative support for groups of workers going through the petition process. We also account for the partisanship of governors, who
may disseminate relevant information for workers and invest state-level resources to help workers applying for it.
Our findings remain robust to the inclusion of these variables, as presented in tables A7 and A8 in the SI. The statelevel union density appears to be negatively associated withan overall level of petitions, which appears driven by its
negative effects on petitions filed by firms. The lack of
micro-level data on unions does not allow us to fully account for the role of unions in the allocation of TAA, but
the positive effect of unions on union-initiated petitions provides some evidence of the direct role played by unions.
As for governor partisanship, having a democratic governor
appears to be positively associated with an overall level ofpetitions.

24
We use the state-level estimates of UI take-up rates as calculated by Auray,
Fuller, and Lkhagvasuren (2019) and Auray and Fuller (2020). They provide anestimate of the fraction of eligible unemployed collecting UI over the 1989–2012
period.
25
In table A5 in the SI, we also show that there is no significant effect of proTAA elite attitudes on UI take-up rates. This shows that the effects of pro-TAA
attitudes are specific to TAA applications.

Table 4. Neighborhood effects on TAA applications

IPW
Pro-TAA
Pro-TAA (neighbor)
CZ FE
Year FE
Observations(1)
Petitions(2)
Affected workers

0.070+(0.036)0.044**(0.014)0.039*(0.020)Yes
Yes
20,357

0.198*(0.088)0.145**(0.045)0.081(0.061)
Yes
Yes
20,357

Note: Robust standard errors clustered on state in parentheses. Dependent variable is logged number of TAA applications in column 1 andlogged number of estimated affected workers in TAA applications incolumn 2. All models control for population (logged). All observations
are weighted by the cell’s share of district population. + p < 0.10, * p <0.05, ** p < 0.01.

Testing the Mechanism (ii): Neighborhood Effects

As a second test of the informational mechanism, and as ameans of tackling one possible source of endogeneity, we
test for the presence of neighborhood effects: Does having
pro-TAA legislators in neighboring districts affect workers’
TAA applications? TAA-related information can easily travelto neighboring districts through different channels, including the news media, co-workers, family, and friends. If legislative attitudes affect levels of TAA-related information in
their home district, we might also expect these attitudes tohave geographic spillovers on applications in neighbouring
districts.
To test this expectation, we create an indicator for proTAA attitudes of legislators in geographically contiguous
neighbors. We generate a variable Pro-TAA (neighbor), whichtakes the weighted mean value of Pro-TAA legislator in all geographically contiguous districts within the same CZ.26 We
use the length of shared border between a given CZ-district
and its neighbors for weighting. If a neighborhood effect ispresent, it will be driven by information, as opposed to any
direct effect of legislators supporting application processes.
Table 4 presents the results. The effects of Pro-TAA (neighbor) appear positive across the estimations. According to the26
Observations are missing when there is no other neighboring district within
the CZ. This is the case when the CZ is contained in a single district.

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CZ FE
Year FE
Observations(6)(7)
Affected workers

S. E. KIM, AND K. J. PELC

Testing the Mechanism (iii): Media Congruence

Next, we test the informational mechanism by exploiting
variation in local media environments. Specifically, we examine whether elite effects are stronger when voters are
more exposed to information about their legislator’s behavior. To do so, we rely on the measure of media congruence
developed by Snyder and Strömberg (2010). This measure
is based on the geographical match between congressional
districts and media markets. As the economic geography of
media markets is different from the boundary of congressional districts, voters are exposed to information about outdistrict legislators as well as their own legislators. The measure for the level of media congruence ranges from 0 to 1,
with higher numbers indicating a larger share of in-district
news coverage relative to out-district news coverage. If legislators’ views have an effect on framing workers’ attitudes totrade adjustment, in a way that has an effect on the odds
of petitioning for relief, we would expect to see stronger(weaker) elite effects on TAA applications in districts withhigher (lower) media congruence.
We test this expectation by separately re-estimating ourbaseline models (table 2) for districts with high congruence versus low congruence.27 The results, in table 5, show
a stark difference in the estimated effects of Pro-TAA according to media congruence. The substantive effect of Pro-TAA
on TAA petitions is larger in the high information environment than in the low information environment. According
to the second model, the estimated effect of Pro-TAA on thenumber of petitioning workers is 28.5 percent in the highmedia congruence districts, while it is imprecisely estimatedin the low congruence districts. As one might expect, the estimated effect in the high information environment is also27
Our data on media congruence come from Feigenbaum and Hall (2015)
who calculated the decade-average media congruence for each district for thetwo decades under investigation. Following their approach, we consider districts
as high (low) media congruence if the calculated measure is higher than 0.75
(lower than 0.25), excluding districts with medium levels of congruence.

Table 5. Elite attitudes and TAA applications by media congruence
Level

High media congruence
IPW
Pro-TAA
CZ FE
Year FE
Observations
Low media congruence
IPW
Pro-TAA
CZ FE
Year FE
Observations(1)
Petitions(2)
Affected workers

0.181**(0.063)0.094(0.063)
Yes
Yes
7,393

0.345**(0.129)0.285+(0.169)
Yes
Yes
7,393

0.304
(0.197)0.029(0.036)
Yes
Yes
2,476

0.628
(0.495)0.087(0.118)
Yes
Yes
2,476

Note: Robust standard errors clustered on CZs in parentheses. Dependent variable is logged number of TAA applications in column 1 andlogged number of estimated affected workers in TAA applications incolumn 2. All models control for population (logged). All observations
are weighted by the cell’s share of district population. + p < 0.10, * p <0.05, ** p < 0.01.

substantively higher than the average effect across all areas
shown in table 2. In sum, information about legislators magnifies their impact on TAA responsiveness.
These findings are consistent with our informational
mechanism: when individuals receive more news about theirlegislators, they appear more responsive to their legislator’s
attitudes toward TAA. But might reverse causality be an issue here? In other words, might it be that legislators become more responsive to their voters’ need for TAA where
the media environment makes them more accountable
to their constituents? While plausible, this seems unlikely
for two reasons. First, as discussed above, our estimation effectively controls for voter demand for TAA by including themeasure for IPW, and reveals an interactive effect of legislative attitude and the trade shock. Second, this reverse causality account could not explain why legislators would be more
responsive to workers than unions or companies. If the effect were driven primarily by legislators varying their responsiveness according to constituents’ information about them,
we should expect no real difference across different types ofpetitioners.
Testing the Mechanism (iv): Web Searches

We conduct a fourth test to assess the informational mechanism, using patterns of web searches across areas. Our central expectation is that more favorable elite attitudes renderworkers more aware of the existence of the program in thefirst place, and thus more likely to apply. We expect that insuch areas, workers would be more likely to search for TAArelated information. Consistent with existing work, we take“knowing what to search for” as an indication of awareness,rather than ignorance (Choi and Varian 2012; Pelc 2013).
In this way, seeking information related to TAA captures
the step prior to putting together a petition. We also run aplacebo test on searches related to social security, to ensurethat the effect is specific to TAA, and not merely a reflectionof overall need.

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first model, the number of petitions is on average 3.9 percent higher when all of one’s neighboring legislators within
the CZ are favorable toward TAA, compared to a neighborhood of all anti-TAA legislators. In the second modelwith the logged number of affected workers covered in petitions as dependent variable, the coefficient again appears
positive but falls short of statistical significance. The number of affected workers included in petitions is on average
about 8.1 percent higher in areas with all pro-TAA legislators in the neighborhood than areas with all anti-TAA legislators. This finding is notable given that the models alreadycontrol for one’s own legislator’s TAA-related attitudes, so
this effect comes on top of these.
These findings also go some way in addressing a possible
concern about endogeneity. It might be that legislators’ attitudes about TAA are shaped by their constituents’ interests,
or by other factors that influence both legislators and constituents. The effects observed in table 2 could then be due
to legislators responding to workers’ attitudes, rather thanthe other way around. While we partly address this concern
by controlling for constituent demand for TAA through theinclusion of the trade exposure measure, there may be otherfactors that are not captured by this measure. Neighborhood effects are not subject to this concern: legislators haveno incentive to respond to the demand of constituents inother districts. Our findings on neighborhood effects thus
provide additional support that we are observing a top-down
effect of legislative attitudes on TAA activity.

117

118

Trade Competition and Worker Compensation: Why Do Some Receive More than Others?

Table 6. Elite attitudes and web searches on government transfer
programs

IPW
Pro-TAA
Income per capita (logged)

(2)
SSDI

−0.067(0.054)0.214**(0.065)0.873**(0.319)
Yes
Yes
4,604

−0.124*(0.058)−0.038(0.063)0.280*(0.136)
Yes
Yes
4,604

Note: Robust standard errors clustered on CZs in parentheses. Dependent variable is logged search volume on “TAA” in column 1 and on“SSDI” in column 2. All observations are weighted by the cell’s share of
district population. + p < 0.10, * p < 0.05, ** p < 0.01.

To test our expectations, we collected city-level data on
web search volume for the keywords “TAA” and “Trade
Adjustment Assistance,” using Google Trends. We also collected the same data for the keywords “SSDI” and “Social
Security Disability Insurance” for the placebo test. The index for search volume ranges from 0 to 100, and reflects therelative importance of a given search in a given area, relative
to all searches in that area. As might be expected, most observations show low search volumes: 78 percent of the data
are recorded as 0 on the 0–100 index. We take the log of thatindex as our dependent variable. As the web search data are
only available from 2004, our analysis is limited to the period from 2004 to 2007, for which we have data on legislative attitudes toward TAA.28 When the city spans different
CZs and districts, we aggregate the city-based data to CZ-bydistrict level by apportioning the data into different cells in
proportion to population.
Table 6 presents the results, which provide measured support for our expectations. We present the results for TAA in
the first column, and for SSDI in the second as a placebo.
In the first model, Pro-TAA appears to be positively relatedwith TAA-related web search volume. In the locations where
legislators are in favor of the program, the search volume
index is on average 21.4 percent higher than other locations. When we rerun the same estimation on variation in
Social Security-related searches as presented in the second
column, we find strictly no relationship. The inferences thatcan be made on the basis of observations from four years remain limited, but the results do provide suggestive evidence
that elite attitudes are related to an increased awareness of
TAA, and appear to generate further information-seeking by
individuals.
Signs of Reverse Causality?

In a further effort to pin down the direction of causality,
we explicitly check for any sign that legislators’ views are instead responses to local demands for adjustment. To do this,we examine the determinants of elite attitudes toward TAA.
With district-year as the unit of analysis, we estimate a probit model focusing on districts with newly elected represen-28
As IPW is measured at the CZ-decade and does not vary within CZ during
the period due to the limited period, we cannot include fixed effects for CZs. We
instead include fixed effects for states in table 6.

DW-nominate

(1)

(2)

(3)

(4)

−1.096**(0.238)−1.211+(0.670)−1.600*(0.669)0.151*(0.068)

Yes
Yes
294

−0.040(0.480)−0.278(0.631)
Yes
Yes
294

−0.249(0.459)−0.230(0.658)
Yes
Yes
294

−1.613*(0.677)0.143*(0.068)0.175(0.417)−0.250(0.461)−0.224(0.662)
Yes
Yes
294

IPW
TAA petitions (lagged)
Democrat
Dem vote share
State FE
Year FE
Observations

Note: Marginal effects. Robust standard errors clustered on states inparentheses. Dependent variable is a binary indicator for pro-TAA attitude by legislator. The sample includes districts with newly elected
representatives. + p < 0.10, * p < 0.05, ** p < 0.01.

tatives.29 If our results merely reflected bottom-up effects,
the number of petitions filed in a district in a previous year
should be associated with the attitudes towards TAA of these
newly elected legislators. With legislative preferences over
TAA as the dependent variable, we thus examine the effectof lagged TAA petitions, looking only at years in which new
representatives took office. We include fixed effects for stateand year throughout. Table 7 presents the results. Controlling for legislators’ ideology (measured using DW-nominate
scores), and each district’s trade shock, the lagged numberof TAA petitions filed in a district falls short of significanceas presented in model 4. By contrast, and as expected, legislators’ ideology, and the district’s trade exposure appear as
significant determinants of legislative attitudes toward TAA.
In sum, our attempt to explain elite attitudes towards TAA
yields little evidence of a bottom-up effect, further bolstering the argument: the elite attitudes that we have shown
driving trade adjustment do not seem to merely be a response to local demands.

Spillover Effects: TAA Petitions and Medical Benefits
Our last theoretical expectation is that the variation in TAA
responsiveness may have an effect on other governmenttransfers. The most disconcerting finding in Autor, Dorn,and Hanson (2013) may be the way in which the import
shock from China increases demand for government benefits over and above trade compensation, from disability
payments, to early retirement and in-kind medical benefits. As Autor, Dorn, and Hanson point out, “these transfer
payments vastly exceed the expenses of the TAA program.”
Such transfers, by definition, are not designed to get people back into the labor force. Insofar as they are “filling in”
individual needs following trade exposure, they represent a
suboptimal policy response.
We focus our analysis on in-kind per-capita medicaltransfer benefits, which make up the biggest share of thegovernment transfers examined by Autor, Dorn, andHanson.30 We expect that TAA has a role to play here too.
29
We cannot estimate fixed effects for districts because their geographicalboundaries change over time during the examined period.
30
Data on medical transfer benefits are from the Bureau of Economic Analysis’s Regional Economic Accounts. We aggregated the county-level medical benefits to the CZ level.

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State FE
Year FE
Observations

(1)
TAA

Table 7. Elite attitudes toward TAA

S. E. KIM, AND K. J. PELC
Table 8. TAA petitions and in-kind medical benefits

IPW
Workers covered by TAA petitions

(1)

(2)

22.317(15.400)−0.005(0.004)67.816**(20.803)

Workers covered by certified TAA petitions
Workers covered by non-certified TAA petitions
Yes
Yes
12,274

Note: Robust standard errors clustered on CZs in parentheses. Dependent variable is per-capita in-kind medical transfer benefits. All observations are weighted by the cell’s share of district population. + p < 0.10,* p < 0.05, ** p < 0.01.

That is, individuals who successfully apply to TAA will haveless need for these alternative forms of government support.
This may be because of direct health effects: if a worker obtains assistance after being laid off, s/he may be less likely
to develop a range of illnesses that correlate with anxiety
and economic distress (Case and Deaton 2015), and haveless need for substitute forms of government support. Or it
may be due to income effects: if laid-off workers see theirincome decline, they may become eligible for Medicaid
benefits, which fall under the measured in-kind medicaltransfers.
As a result, in those areas that see a higher level oftrade compensation, we might see lesser reliance on inkind medical transfers from the government, controlling
for the level of trade exposure. As trade-impacted workers
become less likely to petition for TAA support, they—and
their dependents—become more likely to demand medical
benefits.
We test this expectation by examining the effect of thenumber of workers covered by TAA petitions, with CZ-byyear as the unit of analysis. We also exploit the information
we have on which petitions were certified, versus not certified. Just under 72 percent of the workers applying to theprogram are certified. It follows that these should have agreater effect suppressing demand for medical benefits thannon-certified petitions. We lag all TAA measures by a year.
The empirical challenge entailed in estimating this effectis that TAA is far more targeted than medical benefits, andmuch smaller in scale. On the other hand, medical benefits
tend to be long-lasting (Autor and Duggan 2003), while the
TAA program is limited to two years. The short TAA transfer may thus have a lasting effect on decreasing the demand
for medical benefits, which would cumulate across time, as
TAA recipients of the past re-enter the workforce and thus
avoid becoming recipients of medical benefits for years tocome. In other words, trade compensation today may be
proxying for the effect of trade compensation in the past,
which would render the substitution effect more noticeable
in any given year.
Table 8 presents the results. We find that workers coveredby TAA petitions is indeed negatively associated with the levelof government medical benefits, suggesting some substitution effect is at work. When we distinguish between certified and non-certified TAA petitions, we see the expecteddifference: certified petitions have a substantively stronger
and statistically significant effect on decreasing demand for

medical benefits. Non-certified TAA petitions, meanwhile,remain negative, but fall short of statistical significance.
These findings provide preliminary evidence of the purported spillover effect: TAA applications can affect demandfor other government transfers to individuals, including inkind medical benefits. Combined with our prior findings
about the drivers of TAA petitions, the implication is that
elite attitudes may have the unanticipated effect of increasing demand for a range of alternative government transfers.

Conclusion
On its face, TAA is a solution to one of the key challenges
facing developed democracies: How to pursue policies thatgrow the economic pie, but do so unevenly? Yet because of
the difficulty in identifying its targeted recipients, the program has always relied on demand-side petitions, as do analogous programs like the EGF. The result is a highly unevencompensation of trade impacted workers: areas facing thesame level of trade exposure receive very different levels of
trade compensation. Why is this?
The answer, we argue, is politics. TAA’s design and its
sheer complexity reinsert politics into what is meant to bean apolitical, technocratic mechanism. We test this belief bycoding legislators’ attitudes towards TAA: we collect roll-calland bill (co)sponsorship data and all speeches concerning
trade adjustment over the relevant period. If elite attitudes
frame individual knowledge of, and beliefs about, trade adjustment, then legislators’ attitudes should be reflected in
the rate of petitions, controlling for the magnitude of the
trade impact. This is what we find. Legislators’ stances on
the TAA program have far-reaching effects, significantly affecting the odds of displaced workers successfully applying
for trade adjustment benefits. Specifically, given an identicaltrade shock, a pro-TAA legislator is associated with 16 percent more workers petitioning for TAA. Attitudes towards
TAA thus appear to be partly self-fulfilling.
The story we tell is most evident in Republican-leaning
districts. On average, Republicans are less favorable to the
TAA. As we show, this means that in Republican districts,
trade shocks result in a much smaller increase in trade compensation. But it is also the case that the Republicans’ attitudes towards TAA vary far more than those of Democratic
legislators. Accordingly, it is Republican attitudes that appear to “matter the most” in determining whether workers
apply for, and receive, trade compensation.
Our belief is that this effect operates primarily through an
information channel: workers in pro-TAA districts are simply more likely to be aware of programs at their disposal,
and more likely to seek to use them. We test this in several
ways: we find that petitions initiated by unions, which aremost likely to be informed about TAA, are least prone toelite effects, while petitions initiated by workers and firms
are most prone to elite effects. We also show the existenceof neighborhood effects, whereby elite attitudes matter not
only in the home district, but also in neighboring districts, ina way that is consistent with a top-down effect. Districts with
pro-TAA legislative attitudes also see more TAA-related web
searches, presumably by workers aware of the program who
are seeking additional information. Finally, we show that theeffect of elite attitudes is greatest in high-media congruence
districts, that is, in areas where the media provides voterswith most information about their elected officials. Where
elite views are most publicized, their views on TAA appear
to have the greatest impact on the volume of petitions.
We end by examining whether trade adjustment has
observable spillover effects. One of the most arresting

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CZ FE
Year FE
Observations−0.010*(0.004)−0.004(0.004)
Yes
Yes
12,274119

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Trade Competition and Worker Compensation: Why Do Some Receive More than Others?

31

See Uysal, Yotov, and Zylkin 2015; Monarch, Park, and Sivadasan 2017.
US Government Accountability Office (GAO) 2006. Trade Adjustment Assistance: Most Workers in Five Layoffs Received Services, but Better Outreach
Needed on New Benefits. GAO-06-43. Washington: Government Accountability
Office.
33
U.S. Congress, Office of Technology Assessment, Trade Adjustment Assistance: New Ideas for an Old Program-Special Report, OTA-ITE-346 (Washington,
DC: U.S. Government Printing Office, June 1987).
32

vetoed by the President.34 Three decades later, most eligible
workers still do not know about TAA.
The TAA program is the best test we have of an active
labor market policy in the United States. It is also the oldest trade adjustment program of its scale, anywhere. This
makes it an ideal testing ground not only for the US’ ability
to respond to trade shocks specifically, but also for Organisation for Economic Co-operation and Development countries’ overall ability to respond to labor dislocation. With
growing concerns over how technology will impact the labormarket in coming years, the findings in this article point to
the obstacles ahead. While we show that TAA is far more responsive to trade shocks than current estimates suggest, we
also document the extent to which the deployment of tradeadjustment benefits is vulnerable to politics, which means
their allocation across space and time is uneven. The mereenactment of these programs, without local political will to
support them, is unlikely to meet the challenges currently
facing developed democracies.

Acknowledgment:
Sung Eun Kim thanks the support for this research from a
Korea University Grant (K1903431).

Data Statement
The data underlying this article are available on the ISQ
Dataverse, at https://dataverse.harvard.edu/dataverse/isq

Supplementary Information
Supplementary information is available at the International
Studies Quarterly data archive.
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A large literature is devoted to explaining lower-thanexpected take-up rates of a range of social programs, from
UI to food stamps (Currie 2004; Hernanz, Malherbet, andPellizzari 2004; Sheran and Swann 2007). Variation in information among eligible recipients is among the main explanations offered. We add to this literature by demonstrating how elite attitudes can play a prior role, in this case by
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obstacle to increasing participation, little progress has been
made on this issue.32 In 1987, the House passed a bill thatwould have required states to inform workers about TAA
when the workers apply for the UI.33 The bill was ultimately

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