Trade Adjustment Assistance under the U.S. Trade Act of 1974: An Analytical Examination and Worker Survey

The goals of trade adjustment assistance (TAA) are to ease transition, compensate injury, and bleed political pressure for protectionism. Section I of the paper outlines the economic principles underlying these goals, and their shifting historical importance in the U.S. Sections II and III of the paper discuss the personal characteristics of a representative sample of worker recipients of TAA in 1976, and their labor market success in several subsequent years. Their experience is compared to that of a matched sample of workers receiving standard unemployment insurance (UI) . Comparisons in Section II focus on differences in mean characteristics and experience between the TAA and UT samples, controlling only for whether workers returned eventually to the firm from which they were initially separated. Comparisons in Section III focus on differences between the TAA and UI samples in their ability to recover lost employment and income, using a regression approach that in principle controls for all relevant variables, and not for just one. The most important conclusions of the research are the following. (1) The majority of TAA recipients in 1976 were not permanently displaced, but returned eventually to their former employers. A far greater proportion of UI recipients suffered permanent displacement. (2) Workers receiving TAA had higher incomes on average than their counterparts who received only UI. Their incomes furthermore fell less frequently below the poverty line. (3) TAA recipients nevertheless experienced more frequent and enduring transitional unemployment than did UI recipients, and did not return to their former income level as rapidly. (4) The reasons for conclusion (3) were unclear. It could not readily be explained by differences between the TAA and UI samples in permanence of layoff, generosity of program benefits, age, experience, industry, affluence, economic environment, socioeconomic status, or behavioral responses to any of these variables. Conclusions (1) and (2) are at variance with most previous work on TAA. Conclusion (3) is not, but the traditional explanations for it are those that conclusion (4) rules out.

Exchange Rates and U.S. Auto Competitiveness

This paper develops unique disaggregated data for three U.S. automakers and three Japanese to assess how changes in exchange rates, factor costs, and voluntary export restraints have affected recent price competitiveness in the U.S. passenger car market. We find support for several familiar relationships. The support provided by the experience of the late 1970s is straightforward. The dollar's foreign- exchange value fell below its historical trend, in both nominal and cost- adjusted (real) terms, relative to the major suppliers of U.S. auto imports. U.S. price competitiveness tracked U.S. cost competitiveness quite closely, as average prices of U.S. automakers rose more slowly than those of their principal rival firms (all Japanese). "Misalignment" of the dollar toward weakness by historical norms was reflected in competitive relative pricing by U.S. auto firms, again with respect to a historical norm. The support provided by the experience of the years 1980-1985 is more complex and interesting. Strong offsetting forces appear to have been at work. Relative to major auto suppliers, the effective nominal dollar rose gradually toward its level of the mid-1970s, but the effective real "auto dollar" rose much faster, increasing to a level well above its historical norm by early 1985. U.S. cost competitiveness deteriorated not so much because of exchange rates, but because unit labor costs in manufacturing rose in the U.S. relative to those in major auto suppliers. U.S. auto price competitiveness began to deteriorate correspondingly, but soon stopped, and instead improved gradually between 1982 and 1985, ending up at about the same level in 1985 as in 1980. The Voluntary Restraint Arrangements (VRAs) with Japan, which began in 1981, seem to be the explanation for why the negative effects of exchange rates and costs on U.S. auto price competitiveness were offset. The VRAs are also a reason why average prices of U.S. automakers rose faster than other U.S. prices as measured by the consumer price index, and why in Japan, average prices on auto sales to the U.S. rose much faster than other Japanese prices. In sum, "misalignment" of the dollar toward strength by historical norms and deteriorating labor cost competitiveness, which tended to undermine the competitiveness of U.S. auto firms, were offset by the Japanese VRAs, which buttressed it. The VRAs, however, undermined the inter-sectoral competitiveness of autos.

Optical properties of a low-loss polarization maintaining microfiber

A polarization preserving single-mode microfiber was successfully fabricated by a flame brushing method. A polarization extinction ratio of 16dB is typically maintained through the device with excess loss of 0.2dB

Substrate Induced Denitrification over or under Estimates Shifts in Soil N2/N2O Ratios

Funding: Funding was provided by the Biotechnology and Biological Sciences Research Council, BBSRC UK (http://www.bbsrc.ac.uk). Grant number BB/H013431/1. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.Peer reviewedPublisher PD

The WTO and market-supportive regulation: a way forward on new competition, technological and labor issues

World Trade Organization

Empirical Evidence for Collusion in the U.S. Auto Market?

A supergame theoretic price-setting model of collusion is calibrated to data from the North American passenger car market before, during, and after the voluntary restraint arrangements (VRAs) with Japan. Conclusions about whether the model is consistent with the bans from the various regimes depend on assumptions about market structure, demand elasticities, and discount factors. If one believes that the price elasticity of auto demand is about one, for example, then the calibrations suggest that in, the pre-VRA and VRA regimes, only General Motors and Ford could conceivably have colluded, and even this limited potential broke down in the post-VRA regime.