1.

Openness versus Industrial Pay Inequality

The following scatterplot illustrates the relationship between openness and industrial pay inequality for
both sample countries of the UK and the US:

United Kingdom y = -0.1037x + 0.0054

R² = 0.0014
0.100

0.080

0.060

0.040

0.020

0.000
-0.020 -0.010 0.000 0.010 0.020 0.030 0.040 0.050 0.060
-0.020

-0.040

-0.060

-0.080

-0.100

UK - Trade (% of GDP) UK - UTIP-UNIDO Linear (UK - Trade (% of GDP))

United States y = 1.624x - 0.0097

R² = 0.2434
0.100

0.080

0.060

0.040

0.020

0.000
-0.020 -0.010 0.000 0.010 0.020 0.030 0.040
-0.020

-0.040

-0.060

-0.080

-0.100

USA - Trade (% of GDP) USA - UTIP-UNIDO Linear (USA - Trade (% of GDP))

2. Correlation Analysis
The correlation between the openness and industrial pay inequality for each of the sample countries are
examined using correlation analyses. Using the correlation statistic procedures in Microsoft Excel, the
results are presented and described in the following segments:

2.1. United Kingdom

 UK - Trade (% of GDP) UK - UTIP-UNIDO
UK - Trade (% of GDP) 1
UK - UTIP-UNIDO 0.140726507 1

As seen from the results above, there is a positive yet small correlation between the openness (as
represented by trade-to-GDP ratio) and the Theil Index in the United Kingdom. The positive correlation was
observed at 0.14. This suggests that the increase of openness will also be slightly followed by increases on
the ratio of skilled workers in the country.

USA - Trade (% of GDP) USA - UTIP-UNIDO

USA - Trade (% of GDP) 1
USA - UTIP-UNIDO -0.158706656 1

2.2.