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Unformatted text preview: o being admitted
to the top universities in the world?
Why ever higher grades and ever
more money? The answer is
First, the population of the world
increased but the number of
Harvards did not. Harvard cannot
clone itself. To a large degree, the
world has only one Harvard or
Oxford (in the United Kingdom) or
Indian Institute of Technology (in
India). We can produce more computers, houses, and dining room
chairs as the population of the
world increases, but it seems much
more difficult to produce more
Harvards. So, what happens over
time is an increasing scarcity of topnotch, one-of-a-kind educational
institutions. As a result, the rationing
devices for such institutions must
do more work to ration, which
essentially means that it will
become harder and more expensive
to get admitted to such places.
The second reason involves
globalization. One of the things that Chapter 2 Economic Systems and the Global Economy pays a high dividend in a global
economy is education. “Brains”
seem to matter more than “brawn,”
which will increase the overall
demand for a college education—
not just at Harvard, but at all levels
of high education.
So, will the premium being
placed on education in a global
economy cause the demand at the
most prestigious schools to rise at a
faster rate than at other colleges? The
likely answer is yes. With a growing
world population, and with the global
economy paying a high premium to
those who are educated, we can
expect admission to the world’s
best institutions of higher learning
to become even more difficult.
ABOUT IT Some people suggest
that the competition to
be the best in a world economy will
be much stiffer than the competition
to be the best in a national economy. Do you think this assumption
is true? Explain your answer. 02 (030-053) EMC Chap 02 11/17/05 4:14 PM Page 49 Americans. This practice of hiring people
in other countries is often called offshoring.
(You will study offshoring and outsourcing in
detail in Chapter 15).
It is true that some Americans may lose
their jobs to workers in other countries due to
globalization. It has already happened. Over
the past few years a major New York securities
firm replaced its team of 800 American
software engineers, who earned about
$150,000 per year, with an equally competent
team in India earning an average of about
$20,000 a year. Additionally, the number of
radiologists in the United States is expected to
fall significantly because it is now possible to
send the data (that U.S. radiologists analyze)
over the Internet to Asian radiologists who
can analyze the data at a fraction of the cost.
Keep in mind, though, that offshoring is a
two-way street. The United States might offshore certain jobs to, say, India or China, but
foreign countries offshore jobs to the United
States too. Also, while some Americans do lose
jobs due to globalization, we must remember
that jobs are always being lost (and found) in
an economy responding to market changes.
Even if the degree of offshoring in the United
States were zero, peopl...
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- Winter '14