ABSTRACT
This chapter explains how economic incentives can also play an important role in shaping flows of immigration to a nation such as the United States. Among these economic incentives are wage differentials. The chapter provides the economic effects of globalization on workers by learning about the relationship between international trade and wages. It presents the factors that influence the demand for a nation's labor resources and implications of the factor proportions approach to international trade for how trade affects workers' earnings. The chapter also shows how market wage rates are determined, and how greater international trade can affect wages earned by a nation's workers. The factor proportions approach to trade in labor-intensive and capital-intensive goods predicts that countries with relatively abundant capital resources tend to export capital-intensive goods and to import labor-intensive goods from countries with relatively abundant labor resources. Then the chapter describes about the wage and employment effects of labor outsourcing.
