capital-labor ratio at the global level would be greatly reduced by about 60% of what it would have been without the great doubling. This factor ratio would cause an increase in the returns to capital vis-à-vis to wages and, since physical and financial assets are more concentrated than human capital, it would tend to push inequality up.<sup>3</sup> Yet, other mechanisms also influence the results, so that global inequality fell over the first wave despite the increase in inequality within many countries (World Bank 2006 and 2007, Lakner and Milanovic 2016).

The key facts about the second wave of upcoming changes in the global labor market are also striking: this time, a wave of skilled workers from developing countries will take center stage. On current trends, based on UN population projections (UN 2015) and present rates of educational enrollment (conservatively kept constant into the future), the world will see the number of skilled workers rising from 1.66 billion in 2011 to 2.22 billion by 2050, an increase of about 560 million or 33 percent. As in the case of the great doubling, the role of developing countries is crucial. Due to their investments in education and their growing populations, developing countries will contribute all of the additional workers to the world pool of educated workers (see figure 1). The number of skilled workers in high-income countries is projected to decline, from 603 million in 2011 to 601 million in 2030 and 594 million in 2050.

Not exactly another great doubling, but still a dramatic change. While in 2011, each skilled worker in high-income countries was sharing the global market with two skilled workers in developing countries; by 2030 this ratio will be one to three. The increase in the supply of skilled workers will likely drive down the education premia these workers enjoy (other things being equal), and unlike the first wave, it may affect inequality within countries in a beneficial way. This kind of result has, for example, already been observed in developing countries in Latin America and the Caribbean (Cruz and Milet, 2017 and Lopez-Calva and Lustig, 2010). Note that, because of trade links, wages of skilled workers in high-income countries will also come under pressure even if their domestic supply will not be increasing. Signs of this pressure have also been already identified and attributed to trade by recent research (Autor et al. 2016).

An important factor may, however, have a counteracting role. As in the past, technological progress may be skill-biased and thus offset the supply (education) effect. Research has shown that in high-income countries like the United States, the premia for skilled workers remained firmly high even during expansions of the skilled labor supply (Acemoglu 1998 and 2009). Conditional on what will happen on the demand for labor (i.e. on what happens to technological change), the possible decrease in skilled and sectoral earnings premia may have profound consequences for: i) international trade patterns; ii) global and local economic growth; iii) inequality across countries; and, as mentioned iv) inequality within countries (see Edwards and Hertel-Fernandez 2010; OECD 1999; Shimer 2001; Freeman 2007).

> 3 Indeed, several authors (e.g. Atkinson 2015, Bourguignon 2015, Galbraith 2012, Piketty 2014, and Stiglitz 2012) have called attention to the recent issue of rising capital share in total value added and to the concentration of income and wealth at the top of the distribution in many countries.

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