Impact of globalization on the labor markets of United States and the United Kingdom

This paper studies the changes of labor markets and wage structures that have taken place due to outsourcing and off-shoring. It will contain examples of impacts of outsourcing and off-shoring on the US and UK labor market. It will examine the changes in productivity level of the United States and the United Kingdom. According to different literature it has become clear that a great majority of the authors agree that labor productivity has increased over the years for the United States (Schultze 2004). The UK has also experienced some changes in its labor productivity level namely that they have undergone negative effects in the short run, while on the long run being able to obtain positive results (Hijzen 2003). When it came to the wage structure both countries are dealing with high inequality due to lower demand for low-skilled workers and higher wages for high-skilled workers.