2016年-PIIE彼得森国际经济研究所_Adjustment_and_Income_Distribution_Impacts_of_the_Trans_20页_188kb

Summary of "Adjustment and Income Distribution Impacts of the Trans-Pacific Partnership"

Core Content

This paper analyzes the adjustment costs and income distribution impacts of the Trans-Pacific Partnership (TPP) on US workers and households. It complements the findings of Petri and Plummer (2016), who showed that the TPP would bring substantial benefits to the US economy. The paper emphasizes that while some workers may face displacement and wage losses, the overall net benefits of the agreement are significant and do not worsen income inequality.

Main Views

• TPP Benefits vs. Costs: The benefits of the TPP are substantial, and the costs to displaced workers are relatively small. Between 2017 and 2026, the costs to displaced workers amount to about 6% of the agreement's benefits, while over the full adjustment period (2017–30), the benefits are more than 100 times the costs.
• Adjustment Mechanisms: Adjustment occurs through various mechanisms, including reassigning workers within firms, not hiring as many workers, and voluntary attrition. These methods reduce the pain of displacement and the overall number of affected workers.
• Job Displacement Estimates: An upper bound estimate of job displacement due to the TPP is 169,000 per year, but with employment growth repression and voluntary attrition, the number of displaced workers is reduced to 238,000, mostly in manufacturing.
• Wage Losses: The present value of wage losses for displaced workers is estimated to be 1.4 times their annual wage earnings. These losses are significant but are offset by the broader economic benefits.
• Income Distribution: The TPP has a mildly progressive impact on income distribution. While capital income and labor income both benefit, poor and middle-class households see slightly larger percentage gains than the top quintile when considering spending shares.
• Factor Intensities: The increase in value added due to the TPP leads to a small increase in the demand for labor relative to capital, which is consistent with the Petri-Plummer model.
• Household Consumption: Poorer households spend a larger share of their income on TPP imports, particularly on food and beverages, while wealthier households spend more on services. This leads to a more favorable impact on poorer households in terms of real consumption.

Key Information

Job Displacement

• Upper Bound Estimate: 169,000 jobs displaced annually over a 10-year period.
• Realistic Estimate: With employment growth repression and voluntary attrition, the number of displaced workers drops to 238,000, mostly in manufacturing.
• Adjustment Costs: The total costs of displacement and wage loss are estimated at about 6% of the benefits between 2017 and 2026, and less than 1% over the full adjustment period.

Benefit-Cost Ratios

• Annual Benefit-Cost Ratios:
  • Scenario 1: 12.3 times
  • Scenario 2: 17.7 times
  • Scenario 3 (most realistic): 114.5 times
• The benefits to the US economy far outweigh the adjustment costs, supporting the economic rationale for the TPP.

Income Distribution Impacts

• Factor Income Gains:
  • Capital: 0.44% increase
  • Non-College-Educated Labor: 0.55% increase
  • College-Educated Labor: 0.56% increase
• Household Income Gains:
  • Top Quintile: Slight disadvantage
  • Middle Quintiles: Slightly greater gains
  • Bottom Two Quintiles: Slightly greater gains than the top
• Consumption Impact:
  • Poorer households benefit more from the increase in consumption due to access to TPP imports.
  • The lowest quintile spends 2% more on TPP imports than the median, while the top quintile spends 6% less.

Policy Recommendations

• A Trade Adjustment Assistance (TAA) program with wage-loss insurance is recommended to help those displaced by the TPP.
• Consolidated general worker adjustment programs that aid all displaced workers, regardless of the cause, are suggested as a more inclusive approach.
• Training and relocation assistance should be part of the support, but wage-loss insurance should be the centerpiece of any new program.

Conclusion

The TPP is economically beneficial to the United States as a whole, with net gains for all income groups. While some workers may face short-term adjustment costs, these are relatively small compared to the overall benefits. The distributional effects of the TPP are mildly progressive, and the agreement does not worsen income inequality. Therefore, the TPP should be supported, with appropriate adjustment assistance for affected workers.