It is widely believed by economists that there are clear benefits to specialization and trade. While results using cross country data are mixed, these studies tend to find positive impacts of trade opening on growth. Moreover, recent work on the impacts of trade liberalization finds that the reduction of tariffs in a number of countries is associated with higher productivity and increased reallocation from less towards more productive businesses.

 Yet, it is well known that there are winners but also losers from globalization. Specialization and reallocation due to trade causes some businesses to shut down or downsize, leading to worker layoffs. While other sectors may grow as a result of increased trade, the transition of workers from contracting to expanding businesses will not be instantaneous, because new jobs will not open up right away and workers may not have the right skills or live in the right areas for these new jobs. There can be substantial losses for displaced workers, especially for long tenure workers with job-specific skills. Losses of up to 25% have been estimated for displaced workers with more than three years of job tenure.

 TAA programs have been put in place in recognition that trade generates overall gains but substantial redistribution and losses for some. These programs also recognize that the potential lack of skills and relocation of displaced workers may be impediments to getting new jobs. The programs, thus, pay for training and trade adjustment (TRA), job-search, and relocation allowances.

 The results from the TAA evaluation are not encouraging. These results show that if anything the program makes participants worse off relative to their comparison groups. The matching methodology used in the evaluation was thorough and the best methodology available given the absence of a randomized experiment or other credible identification strategies in this context. Yet, there are a number of issues that cast doubt about the causal interpretation and external validity of the study results:

 The TAA sample may have been more likely than the comparisons to have come from particularly hard-hit industries or occupations. This may have led to some selection biases.

1. The study compared participants who ended participation in TAA and training at the height of the recession in 2008 and 2009, with comparison individuals who were looking for jobs in a stronger economy in 2006 and 2007. The results show some gains towards the end of the 4 year follow-up period, which were larger for some groups such program trainees and younger workers. It is possible that if participants had been followed for longer this positive trajectory of earnings could have continued, especially because the economy was improving by then.
2. The findings may not be applicable to the current TAA program, which was amended in 2011. There were some major changes under the 2011 TAA amendments in program eligibility requirements and available benefits and services. For instance, the 2011 amendments tightened waiver requirements to receive TRA and mandated that all TAA participants receive employment and case management services.