Cotton yarn expands when washed. It lacks the little scales that wool has, which can interlock causing shrinkage. So that fitted cotton sweater you bought will most likely become a baggy sweater after the first wash.
A blend of cotton and wool will, on balance, retain its shape – the cotton expanding and the wool shrinking should cancel each other out, although a lot depends on the relative composition.
Cotton wool pads – the kind of thing you take your makeup off with – will appear to shrink, but that’s only because they’re floofed up with air in the package. As soon as they get damp – with water or makeup remover – the air gets removed, and you get a flat pad of cotton.
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