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2. THE PHRASAL VERBS (specialized texts) Definition and examples Va io!s com"inations S!mma # Self$e%al!

ation tests Bi"lio& ap'#

Specific objectives: At the end of the chapter you will be able to: correctly translate the phrasal verbs from English into Romanian use them in sentences of your own choose the right phrasal verbs as synonims of some given verbs Estimated time for individual study: 4 hours

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(.). Definition and examples A phrasal verb is a group of verb + adverbial particle. he meaning of phrasal verbs is either independent of that of the component elements ta!en separately "e.g. give in#yield$ ma!e out#decipher$ understand%$ or a result of the meaning of the verb and that of the adverbial particle. &ith transitive verbs$ the position of the adverbial particle depends on the type of ob'ect: A. (f the ob'ect is e)pressed by a pronoun$ the particle is placed after the ob'ect: e.g. *e rang me up last night. +. (f the ob'ect is e)pressed by a noun$ the particle may be placed either before or after the ob'ect: *e rang up ,ary last night. *e rang ,ary up last night. +. (f the ob'ect is made up of two or more words "noun+determinatives or noun+determining clause%$ the adverbial particle is always placed immediately after the verb: C. *e rang up his friend om last night. *e rang up the friend he had 'ust made as soon as he got home.

(.2. Va io!s com"inations Add up "ma!e sense%: *is evidence 'ust does not add up. As! after "in-uire about%: .im was as!ing after you. +ac! down "yield in an argument%: /heila was right$ so 0aul had to bac! down. +ear out "confirm the truth%: *elen1s alibi was borne out by her sister. +rea! down "lose control of the emotions%: 2avid bro!e down and wept when he heard the news. +rea! off "stop tal!ing%: *e bro!e off to answer the phone. +rea! up "come to an end%: he party finally bro!e up at 3.44 a.m. +ring about "cause to happen%: he crisis was brought about by her resignation. +ring off "succeed in doing something%: he team tried for years to win the competition and they finaly brought it off. +ring on "cause the onset of an illness%: /itting in the damp brought on his rheumatism. +ring round "influence someone to your point of view%: After much discussion$ ( brought the committee round to my point of view.
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+ring up "mention%: ( feel ( ought to bring up another small matter. Call up "mobilise for military service%: ,ar! was called up when the war bro!e out. Carry off "complete successfully%: .ane had a dificult role to play$ but she carried it off. Carry out "complete a plan%: he attac! was successfully carried out. Catch on "become popular%: his new hair style is beginning to catch on Come about "happen%: 5et me e)plain how the situation came about. Come down to "be in the end a matter of%: (t all comes down to whether you are prepared to accept less money. Come in for "receive6especially criticism$ blame%: he 7overnment has come in for a lot of criticism over the decision. Come off "ta!e place successfully%: ( am afraid that deal did not come off after all. Come out against "meet a difficulty%: &e have come out against a bit of a problem. Come up to "e-ual6especially e)pectations$ standard%: e)pectations. he play did not come up to

Crop up "happen une)pectedly6collo-uial%: ( cannot come to your party$ something has cropped up. 2o up "decorate%: &e are having our living6room done up. 2raw up "come to a stop8 organi9e$ especially a document%: A white sports car drew up outside the door8 he contract is being drawn up at the moment.

Acti%it# ) ). *atc' t'e t+o col!mns, 1. point 2. 5et down somebody b% to find something by accident 3. 0ut up somebody c% reach the same level or pace 4. 7ive up somebody d% educate in a family 5. Catch up with somebody e% disappoint by not helping 6. Call off something f% provide accommodation 7. Come by something g% report to the police 8. 0lay down something h% cancel 9. ell off somebody (% pretend it is unimportant :4. 2rop off somebody '% reprimand and blame +ring up somebody a% leave your passenger at a

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2. *atc' t'e t+o col!mns, a!e off 7o for /et out ouchdown /topover 0ull up Chec! in ;ill up urn up Run over . a% start a 'ourney b% cause an accident to someone c% put petrol into your tan! d% stop the car e% stay for a few hours "between two flights% f% land g% leave the ground h% come une)pectedly (% register with your documents '% ta!e advantage of something

-o a "ette !nde standin& of & amma and %oc"!la # p actice ). T anslate t'e follo+in& p' asal %e "s, +rea! down 6 a machine fails 6 an idea$ plan fails +rea! in 6 a person loses control of himself 6 to interrupt another spea!er 6 to enter a building$ using force +rea! off +rea! out "of% +rea! through "also a brea!through% +rea! up "also: a brea!up% +rea! with 6 to depart from "e.g. traditions$ beliefs% 6 to split up "e.g. marriage$ a band% 6 to stop a relationship "e.g. engagement% 6 to get away from an unpleasant situation 6 to overcome a big problem

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Acti%it# 2 ). Combinations with DOWN +R(<7$ C5=/E C> $ 2(E$ 7E $ 7=$ 5A?$ 0> $ / A<2$ A@E 1. ?ou should......... on smo!ing. 2................................. he uprising was in two days. 3.................................................................... here was a lot of noise$ but gradually it....................................................... 4......................Could you that phone number for meA 5..........................................(nflation will have to be soon. 6.............................................................ob descriptions should always be................................................................clearly. 7..................../hall we to business nowA B. ( donCt thin! the 7overnmentCs latest announcements...........very well. D. Another loss6ma!ing factory had to be........last wee!. :4. he president had to......in favour of another candidate.

2. .om"inations +it' /P, +5=&$ +R(<7$ C=,E$ 7(EE$ @EE0$ 5==@$ 0> $ /*=&$ / A<2$ / A? 1.................................. Earious problems at our meeting last wee!. 2. (tCs high time people.........their bad habits li!e heavy drin!ing$ drugs and$ naturally$ cigarettes. 3............................................... (f you donCt !now the word$F.it 4.......................5ast night ( until three to rewrite my paper. 5............................?ou should be for yourselfG 6............................................................. &ho was the man that was going to....................................................................0arliamentA 7......................................................................................( was surprised to see the large number of people who................................at the rally. 8............................................................. ?ou will go ban!rupt unless you can.....................................................................high standards. D. ( canCt possibly....with this behaviour. :4. (t would be useful for us to...... that -uestion. 0. .om"inations +it' 12 and 12T3, +>R/ $ ;(55$ ;5==2$ 7E $ 7(EE$ *A<2$ .=(<$ 5==@$ /E $ A@E 1........................../omeone should FFF......... this complaint.
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2...................All right. ( FF. : ( accept your point. 3.............../pring FFFFF. very early this year. 4.............................. he deadline for FFFFF.. applications is the end of the current month. 5...........................................(t is the secretaryCs 'ob to FFFFF.. all the forms. 6..........................................................................&e need four card players. &ould you li!e to FFFFFF.. A 7.................................................................&hen she heard the terrible news$ she.........................................................FFF tears. 8.................................................................... 0eople in-uiring about the 'ob have been F.FFF since the advert. D. ( left the !eys at home. ( donCt !now how weCll FFFFFF :4. ( have lost some weight$ so ( will FFFF. my s!irts.

Acti%it# 0 ). .om"inations +it' 3--, C> $ 7E $ 7(EE$ 5(; $ 0A?$ R><$ /*=& 1................................................................................. All the friends were at the airport$ when they were FFFF. @ate. 2.......................................................................Huite often people buy e)pensive cars 'ust to FFFF.. 3........................................... 2inner is ready. Can you FFFFF.. the coo!erA 4...................... he smells it FFFFF. are rather mouth6watering. I. ( am calling bac! because we were FFFFF a minute ago. J. &e will have FFFFFFF. all our debts by the end of the year. 7.............................................;ive$ four$ three$ two$ one$ FFFF. he roc!et is launched. 8.......................................................&ould you believe it that his wife FFFF.. with the local postmanA 9...............................&ould you li!e to FFFFF your coat and have some tea or coffeeA 10.......................&here shall ( FFFF. for the <ational heatreA A@E$ >R<$ /EE$

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S!mma # his chapter has approached the 0hrasal Eerbs$ i.e. the Eerb+Adverbial Combination. ?ou have been given e)amples of verbs combined with adverbial particles and have been re-uested to analyse how their meaning change with every combination.

Self$e%al!ation tests ). .om"inations +it' 3/T, +>R<$ ;A55$ ;(<2$ CARR?$ 7=$ 5==@$ ,A@E$ 0A//$ R><$ /=R : FFFF. hereCs something coming along the road. K. (t is a very complicated plan. ( hope it can be FFFFF 3. ( canCt light my cigarette$ as ( have FFFFF. of matches. 4........................................................... hat heap of clothes will have to be FFFF.. before we put them away. 5........................................................ he map is too old. (t is difficult to FFFF.. which direction to start in. 6..................................... &ho does your sister FFFFFF withA 7. hey say that the famous composer has FFFF.. himself.FFFF$ so he wonCt produce anything for some time. B. (t was so hot and stuffy ( thought ( was going to FFFFF D. ( wish someone would FFFF why he has been so sad for some time. :4. Children are usually upset when their parents FFFF

2. .om"inations +it' 32, CA55$ CARR?$ C=,E$ C=>< $ 7E $ *( $ *=52$ 0> $ A@E$ >R< 1............................. ?ou can always FFFF. me for help. 2................. he >< FFFFF the fighting armies to put down their arms. 3 FFF a second. (Cll get the phone number for you. 4....................................................(t was purely by accident that ( FFFFF the right answer. 5...........L0olly$ FFFFF the !ettle FFFFF L is my childrenCs favourite song. 6.....................................2o you find it hard to FFFF.. with your bossA
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7. 2onCt let it bother you. .ust FFFFF. with the cleaningG

3. Read4 t anslate and de"ate t'e follo+in& texts, Does 5lo"alization Lo+e 6a&es and Expo t 7o"s8 ,atthew .. /laughter and 0hillip /wagel

he Economic (ssues series aims to ma!e available to a broad readership of nonspecialists some of the economic research being produced in the (nternational ,onetary ;und on topical issues. he raw material of the series is drawn mainly from (,; &or!ing 0apers$ technical papers produced by ;und staff members and visiting scholars$ as well as from policy6related research papers. redrafting. he following paper draws on material originally contained in (,; &or!ing 0aper 97/43$ L he Effect of 7lobali9ation on &ages in the Advanced Economies$ L by ,atthew .. /laughter$ Assistant 0rofessor of Economics$ 2artmouth College$ and 0hillip /wagel$ an economist in the (,;1s Research 2epartment. 2avid 2riscoll of the (,;1s E)ternal Relations 2epartment prepared the present version. Readers interested in the original &or!ing 0aper may purchase a copy from (,; 0ublication /ervices "MN.44%. Does 5lo"alization Lo+e 6a&es and Expo t 7o"s8 7lobali9ationOthe international integration of goods$ technology$ labor$ and capitalOis everywhere to be seen. (n any large city in any country$ .apanese cars ply the streets$ a telephone call can arrange the purchase of e-uities from a stoc! e)change half a world away$ local businesses could not function without >./. computers$ and foreign nationals have ta!en over large segments of service industries. =ver the past twenty years$ foreign trade and the cross6border movement of technology$ labor$ and capital have been massive and irresistible. 2uring the same period$ in the advanced industrial countries$ the demand for more6s!illed wor!ers has increased at the e)pense of less6s!illed wor!ers$ and the income gap between the two groups has grown. here is no doubt that globali9ation has coincided with higher unemployment among the less s!illed and with widening income ine-uality. +ut did it cause his material is refined for the general readership by editing and partial

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these phenomena$ as many claim$ or should we loo! to other factors$ such as advances in technologyA his paper see!s to answer that -uestion. Basic -acts (t is best to start with the facts. Are economies around the world becoming more integratedA *ave increased unemployment and widening income disparity in fact coincided with increased economic integrationA 5lo"al 1nte& ation he share of imports and e)ports in overall output provides a ready measure of the e)tent of the globali9ation of goods mar!ets. Although foreign goods are available in every country now more than ever before$ the e)pansion of product mar!et integration has not been continuous over time. &orld trade in relation to output grew from the mid6:B44s to :D:3$ fell from :D:3 to :DI4 because of the two world wars and protectionist policies implemented during the 7reat 2epression of the :D34s$ and then burgeoned after :DI4. =nly in the :DN4s$ however$ did trade flows reach the same proportion of output as at the turn of the century$ a result of the easing of tariffs and -uotas$ more efficient communications$ and falling transportation costs. ;or many advanced economies the most important decade for globali9ation since &orld &ar (( was the :DN4s$ when the ratio of trade to output rose mar!edly in both advanced and developing economies in the wa!e of the two oil shoc!s. (n the developing countries$ e)posure to international trade pic!ed up again in the late :DB4s$ coinciding with their movement toward trade liberali9ation. he rise in the ratio of e)ports to total output li!ely understates the degree of product mar!et globali9ation. ,ore and more output in the advanced economies consists of largely nontradable services: education$ government$ finance$ insurance$ real estate$ and wholesale and retail trade. 0erhaps it would be more accurate to measure the importance of international trade by considering merchandise e)ports as a share of the production of tradable goods only. his alternative measure shows a much larger role for trade. *owever measured$ globali9ation has occurred and gives no sign of slowing down. La"o *a 9et De%elopments

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An important trend in labor mar!ets in the advanced economies has been a steady shift in demand away from the less s!illed toward the more s!illed. his is the case however s!ills are defined$ whether in terms of education$ e)perience$ or 'ob classification. his trend has produced dramatic rises in wage and income ine-uality between the more and the less s!illed in some countries$ as well as unemployment among the less s!illed in other countries. (n the >nited /tates$ for e)ample$ wages of less6s!illed wor!ers have fallen steeply since the late :DN4s relative to those of the more s!illed. +etween :DND and :DBB the average wage of a college graduate relative to the average wage of a high school graduate rose by K4 percent and the average wee!ly earnings of males in their forties to average wee!ly earnings of males in their twenties rose by KI percent. his growing ine-uality reverses a trend of previous decades "by some estimates going bac! as far as the :D:4s% toward greater income e-uality between the more s!illed and the less s!illed. At the same time$ the average real wage in the >nited /tates "that is$ the average wage ad'usted for inflation% has grown only slowly since the early :DN4s and the real wage for uns!illed wor!ers has actually fallen. (t has been estimated that male high school dropouts have suffered a K4 percent decline in real wages since the early :DN4s. (n other countries$ the impact of the demand shift has been on employment rather than on income. E)cept in the >nited @ingdom$ the changes in wage differentials have generally been much less mar!ed than in the >nited /tates. Countries with smaller increases in wage ine-uality suffered instead from higher rates of unemployment for less6s!illed wor!ers. &hat e)plains the differences in outcomes for wages and employment across countries is differences in labor mar!et structures. (n countries with relatively fle)ible wages set in decentrali9ed labor mar!ets$ such as the >nited /tates and$ increasingly$ the >nited @ingdom$ the decline in relative demand for less6s!illed labor has translated into lower relative wages for these wor!ers. (n contrast$ in countries with relatively rigid wages set in centrali9ed labor mar!ets$ such as ;rance$ 7ermany$ and (taly$ it has meant lower relative employment. wo other facts about these labor mar!et trends shed some light on the impact of trade. he first is that about N4 percent of the overall shift in >./. labor demand in manufacturing was a change in s!ill demands within industries$ not across industries from less s!ill6intensive to more s!ill6intensive. At all levels of industrial classification$ the ma'ority of >./. manufacturing industries during the :DB4s employed relatively more high6s!illed wor!ers than in the :DN4s$ even though wages of these wor!ers had risen.

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he second finding is that income gaps have widened in a number of developing countries as well as in the advanced economies$ and evidence suggests that labor demand in developing countries has also shifted toward wor!ers with high s!ill levels relative to the average. ;or e)ample$ research reveals that trade liberali9ation in ,e)ico in the mid6to6late :DB4s led to increased relative wages of high6s!illed wor!ers. &e might have e)pected trade liberali9ation to boost the demand for uns!illed labor and raise uns!illed wages$ but in fact the opposite has happened in some developing countries. Does 1mpo t .ompetition Affect 6a&es8 <ot surprisingly$ people often lin! increased globali9ation to the decline in relative wages of less6s!illed wor!ers in the advanced economies. +ut does increased international trade$ especially with developing countries$ in fact worsen income ine-ualityA here are two approaches to answering this -uestion. =ne focuses on the role of the price of imports in lowering the prices of products and thus lowering wages. he second uses the -uantity rather than the price of imports as a measure of the intensity of import competition. Effect of 1mpo t P ices on 6a&es Economic theory suggests that international trade affects the prices of products in both e)porting and importing countries and this in turn affects the price of laborOthat is$ wagesO within countries by influencing the demand for labor. Changes in product prices brought about by competition from imports alter the profit opportunities facing firms. ;irms respond by shifting resources toward industries in which profitability has risen and away from those in which it has fallen. rade flows thus give rise to shifts in the demand for labor$ as more wor!ers are needed in newly profitable sectors and fewer in unprofitable sectors. (f the supply of labor is fi)ed$ these demand changes lead to a rise in wages$ since wor!ers will demand a premium for switching into more profitable industries. heory also suggests that import competition lowers the price of products "such as apparel and footwear% made by low6s!illed labor relative to the price of products "such as office machines% made by s!illed labor$ so that domestic firms shift toward producing s!ill6intensive goods. +ut have product prices in the advanced economies in fact changed in this wayA (f so$ trade might have contributed to rising income e-uality$ but it must first be shown that changes in product prices are the result of trade rather than other$ purely domestic$ influences. A great deal of research has been done on this -uestion$ and although the conclusions are not robust$ there appears to be little evidence of larger price increases in s!illed6labor6intensive
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products in advanced countries8 if anything$ price increases were larger in the uns!illed6labor6 intensive industries. Rapid technology change seems to have led to relative price declines in s!ill6intensive industries rather than the price decreases in uns!illed6labor6intensive industries one would e)pect in the face of import competition from developing countries. (n most cases$ trade with developing nations has played only a small role$ if any$ in raising income ine-uality in the advanced economies. Effect of 1mpo t Vol!mes on 6a&es A second way of measuring how trade affects wages is to focus on the volume of trade and to analy9e the factors embodied in these flows rather than the prices of imports. rade can be viewed as effectively shipping from one country to another the services of the wor!ers engaged in the production of traded goods. All else e-ual$ imports add to the labor endowment of the recipient country and reduce the labor endowment of the shipping country. 2ata on >./. trade flows have been analy9ed to infer the -uantities of labor embodied in trade flows. he >nited /tates tends to e)port s!illed6labor6intensive products and to import uns!illed6labor6intensive products$ so that the growing importance of trade in the >./. economy has increased the effective supply of uns!illed labor in that country relative to the supply of s!illed labor. Analysis suggests that trade accounted for around :I percent of the total rise in income ine-uality during :DB4PBI$ but that effect diminished in later years. ;urther studies have shown$ for the advanced economies as a whole$ that trade with developing countries has led to about a K4 percent decline in the demand for labor in manufacturing$ with the decline concentrated among uns!illed wor!ers. he results of these latter studies are sub'ect$ however$ to some uncertainty because of the influence of labor6 saving technology in the advanced economies. =ther studies have estimated that shifts in product mar!et demand$ including the effect of imports$ account for less than :4 percent of the increase in wage differential. S#nt'esis &hether analy9ed in terms of import prices or of import volumes$ nearly all research finds only a modest effect of international trade on wages and income ine-uality. he average estimate of the effect of trade on wages and employment is not 9eroOmost research finds some role for tradeObut it is certainly lower than what might be e)pected from purely anecdotal evidence$ and certainly far from the claim that import competition ma!es a Lgiant suc!ing sound.L
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his conclusion might seem pu99ling in light of the presumption that the advanced economies have become more open to international trade since the :DN4s. here are at least two e)planations. ;irst$ it is possible that on balance the advanced economies have not become substantially more open to trade because$ although tariffs have fallen$ they have been replaced with nontariff barriers "for e)ample$ voluntary e)port restraints in autos and steel%. /econd$ firms in the advanced economies might have upgraded their product mi)Oproducing higher value6added goodsOin the face of low6wage foreign competition. (f this is true$ foreign competition has been blunted and need not lead to large changes in relative product prices. he issue of how to measure properly the impact of trade on labor mar!ets is still largely unresolvedOif anything$ the disagreements are becoming more contentious. &hat is remar!able$ however$ is the common finding across both literatures of only a small impact of trade on wages and income ine-uality. 3t'e 1nfl!ences of T ade rade can affect labor mar!ets beyond shifting demand from uns!illed to s!illed wor!ers and thus changing wages. =ne such effect is the influence of import competition on interindustry wage differentials$ a phenomenon in which seemingly e-uivalent wor!ers are paid more in some industries "for e)ample$ aerospace and petroleum% than in others. &hile the e)istence of these wage differentials is well established$ there is less consensus about their cause. =ne e)planation is that wage differentials reflect unobserved wor!er characteristics and are thus consistent with competition in the labor mar!et. ;or e)ample$ +oeing may attract mechanics who are in fact more highly s!illed$ even though they appear to have substantially the same education and e)perience as mechanics in lower6paying industries. Another e)planationO which applies particularly to such unioni9ed industries as autos and steelOis that higher wages reflect profits shared with wor!ers by firms earning above6normal profits in imperfectly competitive product mar!ets$ where union bargaining power allows wor!ers to e)tract these benefits. (f this latter e)planation is correct$ international trade can affect wages by influencing product mar!et competition and the profitability of firms. 2epending on the nature of wage bargaining$ import competition that s-uee9es firms1 profits can lead not only to smaller wage premia in high6wage industries$ but also to a reordering of the differentials across industries as uns!illed wor!ers in declining industries$ such as steel$ find their wages falling behind the wages of uns!illed wor!ers in more successful industries. (f an industry becomes more

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competitive worldwide$ this would be e)pected to result in both lower wages and smaller wage differences across countries. his is important because many who oppose free trade do so not because of its redistributive effects within countries but because they worry about its e-uali9ing effects across countries. ;or e)ample$ opponents of the <orth American ;ree rade Agreement are concerned that import competition will force wages for uns!illed wor!ers in the >nited /tates down to the level of ,e)ican wages. he idea is that each country e)ports the services of labor with which it is well endowed and imports the services of labor that is scarce. rade thus increases the relative supply of each country1s scarce labor$ thereby decreasing its price "that is$ wages%$ and decreases its relative supply of abundant labor$ thereby increasing its price "wages%. his leads to a convergence of labor costs across countries. (n principle$ therefore$ <A; A might be e)pected to lower the wages of less6s!illed wor!ers in low6s!illed6labor6scarce >nited /tates and raise wages of less6s!illed wor!ers in low6s!illed6labor6abundant ,e)ico until the same wage structure prevails in both countries. (n practice$ there is a critical caveat. his is that the theoretical possibility of wage

convergence is sub'ect to many restrictive assumptions$ such as identical consumer tastes and identical production technologies across countries$ perfect labor mobility across industries within each country$ and production of the same mi) of goods across all countries. is unli!ely to be substantiated. .apital *o"ilit# and La"o *a 9ets Capital flows that change a country1s stoc! of capital relative to labor potentially affect the relative price of labor. he volume of capital flows across borders has increased rapidly since about :DN4$ growing at a rate much higher than that of international trade in products. he claim is often made that outflows of capital from advanced economies have lowered wages in the advanced economies as multinational firms establish or e)pand overseas affiliates$ to which the firms then Le)portL or outsource 'obs. &hile this process of outsourcing can generate a shift in demand toward more s!illed labor within firms$ as has happened in most >./. industries$ the process apparently has not yet been large enough to add noticeably to income ine-uality. *ome and foreign labor are at best wea! substitutes for each other and might even be complements$ so that employment rises and falls together at home and abroad. &hen firms outsource to independent contractors rather than
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assumption that labor$ even uns!illed labor$ is as productive in ,e)ico as in the >nited /tates

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affiliates$ the results appear to have only a modest effect on wages of uns!illed wor!ers in the >nited /tates. Even the combined effects of trade flows and capital movements remain smaller than the share of changes in ine-uality e)plained by technological advances. La"o *o"ilit# and 6a&es ,ovements of labor from one country to another can also affect wages. An important issue in the advanced economies is whether immigration of less6s!illed wor!ers from the developing countries depresses the earnings of less6s!illed natives. ;or the >nited /tates$ one study has estimated that as much as a third of the overall increase in >./. wage ine-uality can be attributed to increased immigration during the :DB4s$ an effect two to three times as large as that attributed to imports of goods. +y contrast$ other studies have found only small effects of immigration$ but such studies have been critici9ed as investigating too restricted a geographical area. ;or e)ample$ although research had concluded that the :DB4 boatlift of Cubans into ,iami did not depress wages of less6s!illed wor!ers in that city relative to nearby cities$ a later analysis revealed that in fact less6s!illed natives ad'usted to the influ) of immigrants by moving out of ;lorida altogether. (n recent years$ many European countries have e)perienced larger flows of labor "both inward and outward% relative to the si9e of their populations than has the >nited /tates. (mmigrants in European countries are typically blamed for increases in unemployment rather than for declines in wages as in the >nited /tates. +ut studies have found that both wage and employment effects are in general small. >nfortunately$ rigidities in European labor mar!ets limit the speed of ad'ustment to migration and import competition$ so that any adverse effects may tend to be longer lasting than in the >nited /tates. (mmigration can also lead to increased growth$ particularly if$ as in the case of (srael$ immigrants such as scientists and engineers bring with them significant human capital. (n this case$ immigration potentially leads to increased investment and higher wages and output. (n recent years$ however$ immigrants to most advanced economies have had on average lower levels of human capital than natives do$ suggesting that economy6wide growth effects from recent flows of immigration will be less immediate. Tec'nolo&# -lo+s and 6a&es An inflow of technology can raise labor prices by increasing productivity. (n general$ one would e)pect wages across countries to e-uali9e as technology and production techni-ues
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spread. (ncreased trade may contribute to innovation and the spread of technology$ and thus indirectly affect wages. =ne potential channel through which technology flows from country to country is the transfer of technology by multinational firms from the parent to its affiliates. *igher foreign investment in a particular industry is usually associated with higher wages in that industry. A recent study of ,e)ico and Eene9uela$ however$ indicates that foreign direct investment appears to raise wages only within the plants of the foreign affiliates8 there is no evidence that the technology spills over to increase wages or productivity in domestically owned firms. P!"lic Polic# 1ss!es (ncreased globali9ation has been viewed with concern in many advanced economies. here is a common belief that globali9ation harms the interests of wor!ers$ especially uns!illed wor!ers$ either directly through immigration or indirectly through trade and capital mobility. 0articularly with respect to import competition$ these beliefs appear to be at odds with the empirical evidence that globali9ation has only a modest effect on wages$ employment$ and income ine-uality in the advanced economies. "+y contrast$ changes in technology have led to a pervasive shift toward more6s!illed wor!ers to the detriment of less6s!illed ones.% ,oreover$ the belief that globali9ation threatens wages and 'obs is contradicted by the historical evidence that free trade and the mobility of labor and capital improve global welfare and tend to improve national welfare for all countries involved. /till$ despite the overall benefits of globali9ation for national welfare$ there are ad'ustment costs for particular groups within a nation: globali9ation produces winners and losers. he ad'ustment of those groups of wor!ers displaced by import competition occurs slowly and with significant costs$ such as the need to obtain information about new opportunities$ relocation$ and the loss of firm6 or industry6specific !nowledge. 0olicyma!ers must !eep in mind potential dislocations and ensure that those who are displaced do not become marginali9ed. (t is important$ however$ that any policy actions do not impede ad'ustment but provide incentives for wor!ers and firms to ad'ust and therefore gain from changes in the economic environment. he ad'ustment costs can be minimi9ed by encouraging fle)ible labor mar!ets and by reducing structural rigidities facing firms$ such as onerous wor! rules$ staffing re-uirements$ and hiring and firing costs. =ther policies might include gathering and spreading information about labor mar!et conditions$ standardi9ing professional certification
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procedures across countries$ and enhancing training and educational opportunities so that wor!ers in the advanced economies can upgrade their s!ills to match the demands of the changing global economy. >nfortunately$ policyma!ers with short political time hori9ons might be more concerned with avoiding these short6term ad'ustment costs than with nurturing the long6term benefits of free trade$ increased mobility of labor and capital$ and labor mar!et reforms. credit for this higher standard can be traced to globali9ation. his view is misguided. he world economy has never been healthier than it is today. A good deal of the

*ana&ement implications of t'e inte action "et+een int insic moti%ation and ext insic e+a ds Da%id Bes+ic94 /ni%e sit# of *el"o! ne

,anagers generally$ and anyone formally or informally responsible for oversight of others who are engaged in wor! or learning tas!s$ will be aware that some people are participating more out of interest in the tas! than others are. =thers gain their satisfaction principally out the way in which their performance on the tas! leads to rewards li!e pay or status or good grades in a course. +ut typically there is a mi)ture of motives for which a range of different incentives is relevant. ,ost people will find at least some satisfaction in simply doing the wor!. hey might say$ for e)ample$ that they found it LinterestingL. ;or most people there is also some satisfaction in rewards which are contingent upon performance in the tas!. he balance of these intrinsic and e)trinsic sources of satisfaction varies from one person to another and between different situations. /ome people indeed are highly motivated by both intrinsic interest and e)trinsic rewards: ( found this for e)ample among medical students. ,anagers are usually aware to some e)tent of the ways in which both intrinsic and e)trinsic types of motivation affect performance and wor! satisfaction$ but there are many comple)ities in how these different types of motivations and their relevant rewards affect behaviour. =ne of the most subtle and demanding comple)ities has been found to occur when e)trinsic rewards are given for performance in a tas! which would otherwise have been underta!en purely out of interest. +ut effects of the interaction are not simple and have been a sub'ect of e)tensive debate in recent years. *ow e)trinsic rewards affect intrinsic motivation obviously has many implications for the management of incentives for wor! and study where both e)trinsic rewards and intrinsic motivation are very often found together.

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E)trinsic rewards have been found to reduce intrinsic motivation$ but not in all circumstances. he ma'ority of published research has dealt with the effect on motivation rather then performance$ but conse-uent effects can be evident in performance$ and there are many theoretical predictions supported at least in part by empirical findings. &hen people are intrinsically motivated they tend be more aware of a wide range of range of phenomena$ while giving careful attention to comple)ities$ inconsistencies$ novel events and une)pected possibilities. hey need time and freedom to ma!e choices$ to gather and process information$ and have an appreciation of well finished and integrated products$ all of which may lead to a greater depth of learning and more creative output. E)trinsic rewards tend to focus attention more narrowly and to shorten time perspectives$ which may result in more efficient production of predefined or standardised products. .ob satisfaction and long term commitment to a tas! may also be affected. +y intrinsic motivation we mean a process of arousal and satisfaction in which the rewards come from carrying out an activity rather from a result of the activity. &e spea! of the rewards being intrinsic to a tas! rather than the tas! being a means to an end that is rewarded or satisfying. +y contrast$ one might wor! hard at a tas! in order to eat or gain social approval. /uch wor!$ underta!en as a means to an end$ is typically deficit motivated behaviour$ in which there is a reward as a conse-uence of effort to reach a goal where the deficit is reduced. (ntrinsic motivation tends more to be appetitive$ new information arousing a slight interest leading to an appetite for more. he term QintrinsicR sometimes also occurs with a different connotation in reference to incentives which are consistent with personal -ualities$ intentions and values. /atisfaction gained from such incentives may be seen as intrinsic to the person rather than to the tas!. (t can be the case that behaviour such as underta!ing a scientific research pro'ect can assist in the satisfaction of personal development goals while it is also intrinsically rewarding in itself. he micro sense of intrinsic interest in the tas! is the primary meaning$ but satisfaction intrinsic to the person in the macro sense carries some of the same meaning$ especially in regard to the processes of integration which will be considered further below. *owever$ while the two can wor! together$ intrinsic motivation in the primary sense is vulnerable to being inhibited by the use of e)trinsic rewards in ways which do not give the secondary type of intrinsic satisfaction but are e)perienced as alien to the person. he wor! of several investigators in recent years points to the importance of the secondary or macro type of intrinsic satisfaction from e)trinsic rewards as the clue to managing the effects of e)trinsic rewards in ways which do not inhibit the operation of intrinsic motivation for engagement in the tas!. his paper is concerned with the basic processes that underlie that interaction and its practical conse-uences. he original report of an e)periment which led to many others showing that e)trinsic rewards$ li!e pay and status$ when associated with outcomes of interesting tas!s tend to suppress the operation of intrinsic motivation$ was published by 2eci in :DN: "2eci :DNI%. *e found that if people are paid to do something they would otherwise have done out of interest they will be less li!ely to do it in future without being paid. Evidence of reduced motivation was found in their being less li!ely to return to the tas! when free to do so. here has been some controversy in the literature in the past decade concerning the generality of this effect$ which is ta!en up in the final section of this paper in reference to recently published meta6analyses.
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(t is clear that the effect in not universal. (t can be reduced$ and it may be absent in some conditions$ but it is -uite common. (t poses serious problems for managers in education and other fields in which narrowness of purpose and concentration on short term results are counter6productive. (n this paper ( hope to give at least an introduction to some of the ways in which an understanding of the cognitive and motivational processes which lead to the suppressing effect can suggest principles of effective management for comple) systems. ( thin! there is a general approach to effective management of systems of learning and intellectual achievement and for productive wor! in which originality plays an important part. A !ey element in the solution seems to be related to the secondary !ind of intrinsic motivation mentioned above. his macro type needs to be understood in greater depth. ( will first give a more detailed e)position of how intrinsic motivation wor!s at the micro level of the tas! and then apply it to the macro level of personal development. ( suggest that the same principles apply at the macro level$ in the function of rewards which have a meaning that is intrinsic to the self8 so that in the management of incentives for academic wor!$ for e)ample$ which has a large component of intrinsic interest in the tas!$ e)trinsic rewards need to be integrated with aspects of personal development$ autonomy$ integrity and self direction if the e)trinsic incentives li!e pay and status are not to inhibit the micro level of intrinsically motivated behaviour in teaching and research. he same applies to many other types of wor! including a range of business activities in which creativity is important. =n her theme of Q5et creativity be its own rewardR *arvard +usiness /chool professor eresa Amabile said in an interview "0erry and Amabile :DDD% on her psychological and applied business studies of creativity and intrinsic motivation over twenty years:6 0eople are at their most creative when they feel motivated primarily by the interest$ satisfaction$ and challenge of the wor! itself and not by e)ternal pressures or incentives. Consider$ for e)ample$ the e)perience of a firm (Cve been studying in the last few months$ called E (n!$ which is developing a revolutionary electronic6display technology that enables retailers to change any sign in their store in a matter of minutes. he signs are very light and fle)ible and do not re-uire electricity after the message has been changed. he company is creating something completely different$ while simultaneously addressing an enormous technical and mar!eting challenge. Every person (Cve tal!ed to P from the CE= right through to the people doing the day6to6day technical wor! O is e)cited by the opportunity before them. Each is intrinsically motivated8 that is$ they find rewards in the challenge of the wor! itself. (n order for creativity to flourish$ people must be allowed to have a degree of freedom to choose their approaches to their wor!$ to fail occasionally without ridicule or punishment$ to stretch their hori9ons in terms of wor!ing with others who will share their !nowledge$ and to feel comfortable !nowing that the organi9ation supports their wor! with the re-uisite resources. =therwise$ they will !eep trying the safe$ narrow$ repetitive approaches to solving problems. Elsewhere "Amabile :DDB8 Amabile :DDD% she wrote:6
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here is abundant evidence of strong intrinsic motivation in the stories of widely recogni9ed creative people. &hen as!ed what ma!es the difference between creative scientists and those who are less creative$ the <obel6pri9ewinning physicist Arthur /chawlow said$ L he labor6of6 love aspect is important. he most successful scientists often are not the most talented$ but the ones who are 'ust impelled by curiosity. heyCve got to !now what the answer is.L Albert Einstein tal!ed about intrinsic motivation as Lthe en'oyment of seeing and searching.L hese -uotes from some of Amabile1s popular presentations rely upon e)tensive published research$ "Amabile :DB3a8 Amabile :DDJ8 Amabile :DDB% T'e co&niti%e p ocess t'eo # of c! iosit# Amongst the many concepts that have been introduced in discussions of the issue over the past thirty to forty years$ the specific e)ample of curiosity is central to the more general concept of intrinsic motivation. (t is not the only type of intrinsic motivation. here are aspects of achievement motivation$ especially those concerned with uni-ue achievements$ for e)ample$ which share some of the same -ualities8 and the more general Qeffectence motivationR described by &hite "&hite :DID8 &hite :DJ:% which is evident in the sheer 'oy of being able do something$ especially a playful activity. +ut curiosity$ and particularly its associated sense of wonder$ which is a !ey component of learning at all levels of education$ is the purest instance of intrinsic motivation at the micro level of engagement in those wor! and learning tas!s where rewards for engaging in a tas! come from the tas! itself rather than from its being a means to an end. +efore returning to the more practical implications for management of different types of incentives ( would li!e to provide some more detail of a conceptual framewor! for understanding the problem. ( am introducing first a particular approach to the study of curiosity$ because ( thin! that a further elaboration of this cognitive theory will help later to ma!e sense of the comple) findings and other theories regarding effective functioning and maintenance of intrinsic motivation. ,any investigators have approached the study of curiosity through the study of individual differences$ and my cognitive process theory of curiosity "+eswic! :DJI8 +eswic! :DN:% was developed in such studies of curiosity as a trait varying between people and reasonably consistent for individuals across situations. +ut later wor! treated it as both a consistent trait and a momentary state$ following the earlier models for assessment of an)iety. /everal authors$ including especially /pielberger "/pielberger$ 0eters et al. :DNJ8 /pielberger and /tarr :DDS%$ and here at ,elbourne$ <aylor "<aylor :DB:%$ have developed measures and studied the dimensionality of curiosity as both a trait and a state. /ome measures curiosity or a somewhat broader concept may be designated Qintrinsic motivationR "+eswic! :DNS8 Amabile$ *ill et al. :DDS%. (n /pielberger1s wor! it was in con'unction with trait and state measures of an)iety. &hile curiosity is a state which is commonly e)perienced at least occasionally by all people$ and there are some events which arouse curiosity in almost everyone$ it is also a trait which is much more typical of some people than of others. /o a magician might by clever manipulation produce une)pected events which arouse curiosity$ with people wondering$ L&here did that come fromL$ and L*ow did he do itAL /uch wondering illustrates the state of curiosity. he trait$ which varies between people$ is seen in the way that some people will typically focus attention on events which they see as strange or peculiar$ and then perhaps investigate them further$ while others will pass them by with little
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interest. /ome people are more li!ely than others to be in situations where strange or novel events occur$ as well as being more li!ely to focus attention on small discrepancies from what is e)pected which happen to occur wherever they are. /ome might people might go out loo!ing for new or strange things. ;or some people curiosity can be evident in attention to a great variety of different stimuli without focussing for long on any of them$ while for others it is found more typically in careful attention to specific phenomena. +erlyne "+erlyne :DJ4%$ for e)ample$ described specific and diversive types of curiosity$ and Ainley and others have distinguished between breadth and depth factors in curiosity "Ainley :DBN%. Curiosity is a term that refers to -uite a wide range of phenomena "5oewenstein :DDS8 @ashdan K44S%. According the cognitive process theory$ which is concerned mainly with the depth type of curiosity$ consistent sensitivity to small discrepancies against an ordered bac!ground is due to two contrasting facets of curiosity as a trait: openness to novel stimuli and a concern for orderliness. &hen those two personal -ualities are measured separately from curiosity we find that they are negatively correlated$ as one would e)pect from common sense. hat is$ people who readily accept and see! out novel$ strange or unusual things$ who are in general stimulus see!ing$ are typically not concerned with having everything in its proper place or with orderliness in general. Eice versa$ people who value orderliness may not as often see! novel or strange things. "( use Qstimulus see!ingR here in a more general sense than the specific variable in Tuc!ermanCs /timulus /ee!ing /cale "Tuc!erman :DNI% which is loaded with items on high ris! physical activities. =penness to e)perience has been recognised in recent years as a general personality factor$ especially in the commonly used five6factor model. /ome form of orderliness is also commonly represented in multi6factor models of personality.% +ut$ although the two -ualities of orderliness and openness tend to be opposed and not often found together in great strength$ it turns out that highly curious people tend to have both these contrasting characteristics$ they both see! novelty and value orderliness. (f they had either one alone$ that is if they sought novelty without care for order$ or they disregarded novel stimuli while guarding their well ordered map of the world$ they would e)perience few conceptual conflicts. hey would be less aware of gaps and discrepancies. &hereas if they tried to be both open to novelty and see! order they would e)perience many conflicts$ and they would tend to be aroused by inconsistencies and incompleteness. he result then of combining openness with orderliness is a propensity for that careful attention which is characteristic of the depth type of curiosity. &hen Ainley "Tuc!erman :DNI8 Ainley :DBI8 Ainley :DBN% distinguished between breadth and depth types of curiosity$ she found that my -uestionnaire measure of curiosity or intrinsic motivation "+eswic! :DNS% correlated highly with her depth factor$ while it was unrelated to the breadth factor. here are individual differences not only in the probability and the intensity of being aroused$ but also in how people deal with conceptual conflicts and gaps in !nowledge when they are e)perienced. +efore going a little into the dynamics of the process there is another prior consideration. (n the past ( have seen curiosity as a process of creating$ maintaining and resolving conceptual conflicts$ but ( have been convinced in reviewing more recent wor! that one must also spea! in terms of gaps in !nowledge$ understanding or perceptions and their effects. he common factor seems to be a basic tendency to see! an integrated understanding or map of the world. Conflicts and gaps give rise to an effort to produce a new conceived or perceived order of things in a new whole or gestalt that accounts for or ma!es sense of a discrepancy. ( have not yet fully wor!ed through the implications of this more highly
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generalised conception. (n what follows ( am presenting the theory in the previous terms of how people deal with conceptual conflict$ but similar processes should apply in regard to gaps in !nowledge. he more general concept may be a sense of incompleteness. he conflict arises from a lac! of fit between an incoming signal or stimulus and a cognitive map or category system which represents the world from past e)perience. /imple conflicts are generated by some very primitive unlearned responses$ such as the orienting response which directs attention to new stimuli or to anything which stands out from the bac!ground in one1s perception of the environment. 0eople -uic!ly learn to ma!e sense of such signals as part of a more comple) learned process of adaptation by referring them to an ordered representation of what has happened before. (f a new signal is something very similar to what is already there it will be easy to give it meaning by fitting it into that representation of past e)perience$ but if it does not fit easily there will be a conflict which can be resolved by one of two processes of modification$ which following 0iaget "0iaget :DI4% ( have called assimilation and accommodation. (n the first$ assimilation$ the conceptual conflict is resolved by changing one1s perception of what is out there$ that is by modifying the signal to fit the cognitive map. Alternatively$ one can modify the cognitive map to accommodate the signal. he more strange$ unusual or une)pected the event$ or you might say the greater the information value of the signal$ the greater will be the need for assimilation or accommodation or both. 0eople who readily assimilate what they e)perience to what is already !nown will not e)perience very much curiosity. hat might be because they e)perience little conflict when they do not have a sufficiently differentiated map of the world for a novel event to cause much conflict. =r they may be too an)ious about its effects and fail to perceive its uni-ue characteristics$ and so act defensively to put it away with as little trouble as possible. hey could thus ma!e it fit where it does not fit well$ and thus store potential for future conflict. =n the other hand some people will readily re6order their view of the world to accommodate new information$ but if they do so -uic!ly and without gathering more information they might simply pigeon6hole it or produce a new category which is not well integrated with the whole cognitive map. hat map would then be unli!ely to remain stable for very long. he highly curious person with a high regard for the uni-ueness of the signal and for the integrity of his or her cognitive map$ and will be loathe to either assimilate or accommodate. *e or she will see! the best possible fit$ and typically that will re-uire see!ing additional information to build a suitable new integration of the incoming information with what was !nown before. /o -uestions will be as!ed$ calculations might be made$ things will be turned over and loo!ed under$ there may well be much wondering and doubting8 but after the ball has been !ept bouncing for a sufficient length of time some sort of resolution will be reached in which sufficient accommodation occurs for the conceptual conflict to be resolved. he result is that a new order or representation of the world is developed. here is no homeostatic restoration of a previous state of affairs that became disturbed$ but a new order is produced. he assumption we ma!e is that there is a natural tendency towards such a systematic integration of the cognitive map. hat is given in the way the brain functions. he processes of integration typically re-uire one to see! information which is additional to that which gave rise to the perceived conflict or gap which aroused curiosity. (nformation see!ing and processing are instrumental acts which follow from arousal. /ome people will be much better able than others to carry them out and more confident in their capacity to cope with the arousal$ without debilitating an)iety$ and so are more li!ely to remain in a situation of
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uncertainty long enough to produce an enduring new integration. (ndividual differences will then appear at many points in the creation$ maintenance and resolution of conceptual conflicts and gaps in !nowledge.

TE*A DE .32TR3L (*en:ionat; pe Platfo ma Sa9ai), 6 ite an essa# of 2 pa&es entitled Loo9in& fo a 7o"4 in +'ic' #o! s'o!ld app oac' t'e +o 9 s#stem in t'e p esent &lo"al en%i onment4 t'e <o" #o! a e d eamin& of4 t'e ed!cation #o! need fo it4 t'e int insic and ext insic satisfaction and ot'e elated aspects.

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