EC966 – Assessment 2 – Essay – 2020-2021

Assessment 2: Research-informed policy note

EC966 – Labour Economics

Answers will be precise and concise (while remaining grammatically correct). The number of words for the answer is limited to 1,000 words (please include a word count).

You have been hired to advise the government of a developed country. Following a series of trade agreements, several industries, in particular in the manufacturing sector, have been facing increasing competition from countries with lower labour costs. Affected firms have fired many workers, increasing the number of unemployed among middle-aged workers with skills relating to these sectors, and located in some areas. You are asked to review available evidence about the impact of trade on labour-market outcomes, as well as possible policy avenues to remedy the crisis.

When drawing theoretical predictions, you should be precise about which theoretical framework you’re referring yourself to. You should not use any equations in this note. However, you should use formal reasoning and precise academic references (authors’ names, year, and name of the journal if ambiguous). You can use up to 10 academic references for this note, choose the most relevant ones wisely. Vague and unjustified statements will be penalised, as will elements not directly related to the question.