According to the Nobel Prize Economist TW Schultz, there are five ways of developing human capital: (a) Provision of health facilities which affects fertility, mortality, life expectancy, strength, vigor, and vitality of a nation; (b) Provision of on-the-job training opportunities to enhance the skill of the labor force; (c) Provision of formal education at the primary, secondary, and higher levels, (d) Continued study and extension of adult education; and (e) Provision of work mobility (migration and retraining) to lower the adjustment costs of changing labor market conditions brought about by technological and international competition.

a.Freely comment on the information provided above.

b.Which, if any, of the five ways Schultz proposed would make best policy for the USA, i.e., it would promote economic growth and reduce income inequality?

c.Now, assume that technological change reduces the demand for low skill labor and increases the demand for high skill labor, which gives rise to income (wage) inequality. How might the situation get worse or better with the in-migration of (i) more unskilled labor than skilled labor, and (ii) more skilled labor than unskilled labor?