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Content: Numerous studies of the direct impact of trade on wages in advanced countries conclude that the depressing effect is small. Foreign direct investment (FDI) in capital-scarce developing countries can raise the productivity of workers, and thus their wages, by transferring management skills, capital, and technology, and in the process sometimes outsourcing jobs from advanced countries. FDI inflows to developing countries rose from 0.6 percent of their GDP in 1980 to 3.5 percent in 2008. However, over the past decade, total net capital flows (including official and private portfolio flows) equal to 2.6 percent of developing countries’ GDP actually have gone from developing to advanced countries, largely in the form of Treasury bill purchases. This type of investment did not generate jobs directly in advanced countries, but may have reduced the need for domestic borrowing that would have crowded out domestic investors. On balance, it is therefore not clear whether capital flows to and from developing countries have played a large role in promoting wage convergence, though capital flows taking the form of FDI almost certainly have. Variousstudieshave shown that skill-biased technological change is a major driver in reducing the demand for unskilled workers. At the same time, the transfer of all types of technology through FDI, international trade (imports of machines and learning from competitors and sophisticated customers), and migration (via contacts with diasporas and returning migrants) from advanced to developing countries provides an enormously important opportunity for raising productivity and thus wages in the latter. Moreover, increased competition from low-wage countries tends to spur labor-saving technology in advanced countries. However, despite the deepening of these channels, remaining barriers to trade and investment, inefficiencies in transport and communications, and structural limitations to the absorption of technology in developing countries, such as insufficient levels of education and business climates that discourage ventures that could adopt technologies, continue to impede the spread of technology.