DP5892 | Inequality and Schooling Responses to Globalization Forces: Lessons from History

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In the first global century before 1914, trade and especially migration had profound effects on both low-wage, labour abundant Europe and the high-wage, labour scarce New World. Those global forces contributed to a reduction in unskilled labour scarcity in the New World and to a rise in unskilled labour scarcity in Europe. Thus, it contributed to rising inequality in overseas countries, like the United States, and falling inequality in most of Europe. Falling unskilled labour scarcity and rising skill scarcity contributed to the high school revolution in the US. Rising unskilled scarcity also contributed to the primary schooling and literacy revolution in Europe. Under what conditions would we expect the same responses to globalization in today's world? This paper argues that modern debates about inequality and schooling responses to globalization should pay more attention to history.