Scenario: the Following Quote Describes China's Effect on World Labor

question 21

Multiple Choice

Scenario: The following quote describes China's effect on world labor markets.
China's emergence as a great economic power has induced an epochal shift in patterns of world trade. Simultaneously, it has challenged much of the received empirical wisdom about how labor markets adjust to trade shocks. Alongside the heralded consumer benefits of expanded trade are substantial adjustment costs and distributional consequences. These impacts are most visible in the local labor markets in which the industries exposed to foreign competition are concentrated. Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in the US industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize. (The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade by David H. Autor, David Born, and Gordon H. Hanson, Annual Review of Economics Vol.8:1-635, October 2016)
-Refer to the scenario above.Which of the following statements does this quote best exemplify?

• A) Government might not be able to effectively carry out policies to compensate losers from international trade.
• B) It is often difficult to pinpoint exactly who the winners are and how much they each gained.
• C) It is often the case that the losers are spread throughout the economy and sometimes touched in very small ways.
• D) Losers from trade may be concentrated in certain industries and in certain geographical areas, and the impact may be long lasting.

---

Definitions:

Outcome Statement

An outcome statement typically articulates the expected results or changes from an intervention, program, or activity, often used in planning and evaluation contexts.

Dietary Intake

The amount of food and drink that a person consumes, influencing nutrient and energy balance.

Objective Data

Information that is measurable and observable, gathered through physical assessments or diagnostic tests.

Heart Rate

The number of times the heart beats per minute, indicating cardiovascular health.