Economics of Social Issues

Immigration and emigration brought about by globalization also assist in reducing poverty in Poland. Globalization increased emigration from Poland to United States of America. Individuals had a feeling that they have a better chance to make a better living in foreign country than in their own country. They therefore left their nation hoping to get better employment opportunities, better education and exposure to a very different. This however, benefitted Poland in the long run. Those leaving the nation had to come back with new skills and increased wages thus reducing poverty in Poland. Globalization therefore assists in reducing poverty rate (Collins, & Graham, 2004).

Inequalities among countries

Globalization usually causes rapid transformations in trade relations, fiscal flows and labor mobility among nations in the world. The development has brought the economies of the nations close together. It has also made the economies to be strongly interrelated. This therefore has resulted into reduced inequalities among nations even if there is a huge heterogeneity in the degree of process of globalization over time and among nations and regions.

Within the factor world model of factor movements, the free movement of factor of production such as labor and capital tends to minimize inequality among nations as it has different impact on inequality in rich and poor countries. In the factor world, global inequality or inequality among nations is because of different capital-labor ratios. Nations that are rich usually have more capital per worker than nations that are poor. Rates of return to capital are usually higher in poor countries than in countries that are rich. Wages therefore will be very high in countries that are rich than poor countries (Martell, 2007).

According to Martell (2007), the free movement of factor of production brought about by globalization forces capital to move from rich to poor countries, while workers will be forced to move from countries that are poor to rich nations. This therefore reduces capital to labor ratio in rich nations, while that in poor nations are increased. The flow continues until capital to labor ratios equalizes among countries, thus making factor prices to be equal. This steadily reduces income gaps among nations which intern reduces global inequality or inequality among nations.

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