Full Citation

Title: Skill Overshooting in Occupational Training with the Trade Adjustment Assistance Program

Citation Type: Miscellaneous

Publication Year: 2019

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Abstract: We investigate training choices made by workers entering the Trade Adjustment Assistance (TAA) program. This is important as more workers enter these types of programs due to technological change and globalization. We show that workers that choose a training occupation beyond their skill level (skill overshooting) achieve higher earnings and wage replacement rates with the cost being that it lowers their reemployment rates. Specifically, skill overshooting lowers the reemployment rates for these trainees by 2.0 percentage points, but they enjoy an increase in their wage replacement rate by 2.0 percentage points and $615 in annual earnings. An investigation of subsamples, shows that skill overshooting affects different groups of trainees differently. Female and rural-dwelling trainees enjoy the most benefits in earnings ($1,443 and $1,080, respectively) without hurting their chances of reemployment. The highly educated sample enjoys a large increase in earnings but still bears the decline in the reemployment rate.

Url: http://www.personal.kent.edu/~jbarne25/Barnette-Park-Overshooting.pdf

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Authors: Barnette, Justin; Park, Jooyoun

Publisher: Kent State University

Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure, Other

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