Insight: Ideas for Change - Globalization and Unemployment - Michael Spence

TL;DR

Nobel laureate Michael Spence discusses how the intergenerational opportunity set is declining in industrialized countries, leading to reduced opportunities for future generations.

Transcript

my um my guest doesn't need any introduction it's Michael Spence he's um Nobel Prize Nobel lauret in economics and uh that's where we're going to let it go um we'll start right with the conversation he and I are kind of colleagues not as no Nobel laurates but we hang out occasionally at the same American campus which is Stanford but we never met an... Read More

Key Insights

• ❓ The decline of intergenerational opportunity is a major concern in industrialized countries.
• 🥺 Developing countries are moving up the value-added chains and impacting the global economy, leading to structural changes.
• 🚱 The tradable sector generates growth but not employment, while the non-tradable sector offers more job opportunities with limited income growth.

Questions & Answers

Q: What is the main concern that keeps Michael Spence up at night?

Michael Spence is worried about the declining intergenerational opportunity set in industrialized countries, where future generations may have reduced opportunities for employment and rewards.

Q: How are developing countries impacting the global economy?

Developing countries are moving up the value-added chains and having a growing influence on each other and the advanced countries. This has implications for mobility and the structure of economies in the West.

Q: What factors contribute to the declining mobility in the US and other Western countries?

The tradable sector, although creating growth and value, does not generate employment in the same way as the non-tradable sector. This leads to more employment opportunities in the non-tradable sector, but with limited income growth.

Q: Can reindustrializing the US help solve the issue of declining opportunities?

Reindustrialization can be achieved by focusing on education, skills training, and adding competitive value in sectors where the US can be successful. It is not about mass production but rather a strategic approach to manufacturing and services.

Summary & Key Takeaways

• Michael Spence is concerned about the declining intergenerational opportunity set in industrialized countries, indicating that future generations may not be better off.

• Surveys in America suggest that people believe their children and grandchildren will have limited opportunities for employment and rewards.

• Developing countries are moving up the value-added chains and impact the global economy, affecting the structure and mobility in the West.