ECON Lesson 8

ECON Lesson 8 - Ashlie Michelle Ferguson ECON 2010...

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Ashlie Michelle Ferguson ECON 2010 Enrollment #642885 Lesson 8 1. Two major factors that contribute to increased inequality in wages are economic globalization and skill biased technological change. International trade allows for those markets with comparative advantage over the U.S. to import their goods at a lower price. This will ultimately decrease the demand for that market domestically. This decrease in demand decreases wages. On the other hand, if the domestic country has a comparative advantage and exports their goods, the demand for that market will increase, driving up the wages in this market. Next, skill biased technological change also contributes to wage inequality. Skill biased technological change means that the technological processes that are up and coming are biased towards highly skilled workers, meaning that only trained, educated workers are able to use the technology. This increases the demand for highly skilled workers, which, in turn, increases
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This note was uploaded on 05/11/2010 for the course ECON 2010 taught by Professor Roussel during the Spring '08 term at LSU.

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ECON Lesson 8 - Ashlie Michelle Ferguson ECON 2010...

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