TY  - JOUR
AU  - Brander,James A.
AU  - Spencer,Barbara J.
TI  - Trade Adjustment Assistance: Welfare and Incentive Effects of Payments to Displaced Workers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3071
PY  - 1989
Y2  - August 1989
UR  - http://www.nber.org/papers/w3071
L1  - http://www.nber.org/papers/w3071.pdf
N1  - Author contact info:
James A. Brander
University of British Columbia
Faculty of Commerce
2053 Main Mall
Vancouver, B.C. V6T 1Z2  CANADA
Tel: 604/822-8483
Fax: 604/822-8477
E-Mail: brander@sauder.ubc.ca

Barbara J. Spencer
University of British Columbia
Sauder School of Business
2053 Main Mall
Vancouver, BC  V6T 1Z2
CANADA
Tel: 604/822-8479
Fax: 604/822-8477
E-Mail: barbara.spencer@sauder.ubc.ca
AB  - We analyze the welfare effects of conditional trade adjustment assistance (i.e. assistance that is received only if displaced workers remain  unemployed), and compare the conditional program with unconditional assistance. Taking the level of assistance as exogenous, we show that either the conditional or unconditional program may impose greater efficiency costs, depending on underlying parameters. We then introduce an explicit social welfare function and solve for the optimal level of assistance for each program. Finally, we compare the optimized values of the two programs. If the distribution of wage offers is uniform, the unconditional program is welfare superior. 
ER  -