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Unformatted text preview: H.S. Grad Some College College Grad College + Professional 1979 10.06 11.23 12.24 15.52 18.80 1989 8.44 10.21 11.82 15.90 20.36 % Change-16.1-9.1-3.5 2.4 8.3 Re-define the factors of production in the Heckshin-Olin model. Skilled labor and unskilled labor [not capital and labor]. U.S. is relatively abundant in skilled labor compared with most other countries. By H-O Theorem, U.S. has a comparative advantage in producing goods intensive in skilled labor. Skill-Biased Technology Change New technologies entered the workplace that increased the demand for skilled workers relative to unskilled workers. The problem with this explanation is that it cant be shown. Skill-biased technology change would have to be concentrated in skill-intensive sections. Immigration of Unskilled Workers Some people call the factor price of equilibrium theory the price insensitivity theorem. Factor prices not very sensitive to change in factor supplies....
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- Spring '10
- International Economics