• The Korean Journal of Applied Statistics
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• v.25 no.1
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• pp.45-54
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• 2012

Published employment statistics do not provide enough information about the relationship of unemployment and economic and business conditions. This study investigates long-run equilibrium relations and short-run adjustment process of unemployment and discouraged unemployment with major price variables in the business coincident and lagging framework. Speed of adjustment from short-run disequilibrium to long-run equilibrium is found to be relatively faster for discouraged unemployment that appears more responsive to changes in most of explanatory variables. Discouraged unemployment is found to reflect reality and suggested to be a more meaningful statistical index.

• Journal of Labour Economics
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• v.35 no.1
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• pp.89-109
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• 2012

This paper evaluate the robustness of the Okun relationship based on Korean data for 1979~2008. For estimating a natural unemployment rate, this study uses time series econometric methodologies. This paper finds some interesting results; first of all, a bench mark estimates of Okun's ${\beta}$ range from 2 to 4 with different methodologies. This is a little bit higher scale than that of Lee(2000)'s results, which estimated the Okun's coefficient on the advanced countries' 1955~1996. Secondly, we test an asymmetric behavior of unemployment rate on business cycle. But the results are mixed. Finally we cannot find the evidence of structural break for the periods of 1979~80 and 1997~98 crises.

• Economic Analysis
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• v.26 no.4
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• pp.39-64
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• 2020

Typical business cycle models have difficulties in explaining key macroeconomic labor market variables, such as employment and unemployment, as they usually consider labor hour choices only. In this paper, we introduce labor market search and matching frictions into a New Keynesian nominal rigidity model and estimate it by Bayesian methods to examine the dynamics of the key labor market variables and business cycles in Korea. The results show that unemployment rates are largely explained by technology shocks, which affect the labor demand side, as well as labor supply shocks. In addition, wage bargaining shocks originating from the bargaining process between firms and workers have non-negligible negative effects on output and employment growth, and careful measures need to be taken to limit their adverse effects.

• Journal of Labour Economics
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• v.25 no.2
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• pp.1-32
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• 2002

This paper investigates how real wages adjust to regional and cyclical shocks in the Korean labor market. Major findings are as follows. First, like most longitudinal studies in this literature, we find that real wages are strongly procyclical and more procyclical for men than for women. Second, consistent with the theory prediction of efficiency wages, both permanent and transitory components of real wages are negatively correlated with the local unemployment rate. Third, when overall and local unemployment rates compete in a wage equation (our preferred specification), current wages are dominantly affected by the overall rate, and the effect of the local rate is rather small. This rejects the Blanchflower and Oswald's hypothesis that wages are primarily determined by local labor market conditions. Finally, no lagged effects on wages are detected in the overall or local unemployment rate.

• Journal of Labour Economics
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• v.26 no.3
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• pp.149-179
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• 2003

This study is analysing the factors determining individuals' behavior of selecting self-employment not only at the micro-level but also at the macro-level to put a particular emphasis on the financial constraint and unemployment rate representing business cycle. The data used in this study are "Korean Labor and Income Panal Study" of the Korea Labor Institute and "Economically Active Population Survey" of National Statistical Office. The main findings are as follows. First, human capital such as educational attainment and job experience has positive effects on male's selection of self-employment. The effects of job experience, however, changed negative for female's selection of self-employment. Second, real estate is significantly enhancing the selection probabilities of employer selection while the income from financial assets has negative effects. Third, entrepreneurial culture and environment are also raising the self-employment selection probability. Lastly, the regional unemployment rate representing the business cycle has positive effects on the self-employment selection after the financial crisis in 1997 both at the micro and macro level. Moreover, the coefficient of regional unemployment rate has changed positive in the structural model of self-employment selection controlling for selection bias and income opportunities, which means that individual's behavior of self-employment selection is rather complex when accounting for the uncertainties of income opportunities and diverse characteristics of self-employment workforce.

• Journal of the Korean Regional Science Association
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• v.33 no.3
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• pp.3-19
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• 2017

The purpose of this paper is to analyze the impacts of regional industrial diversity on regional business cycle response to national volatility. We employed mean group and pooled mean group estimators of panel vector error-correction models in order to control unobserved heterogeneity of the port cities, such as Pusan, Ulsan and Incheon. The results show that in various industrial regions, short-term fluctuations in the unemployment rate are small compared to other regions. On the contrary, long-term volatility of manufacturing production index is low in those regions.

• Journal of Labour Economics
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• v.37 no.2
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• pp.1-47
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• 2014

Longitudinal analysis of individual wage data received from the Korea Labor and Income Panel Survey (KLIPS) for the 1998-2012 period reveals that nominal wage reductions are prevailing among job stayers. It is also found that the probability of nominal wage cut is higher in the period of lower inflation or higher unemployment, and affected by various individual or group characteristics. Additional analysis of two establishment-based average wage series and the KLIPS shows that real wages are substantially procyclical, which is attributed to the strong procyclicality of nominal wages rather than countercyclicality of inflation. Current findings defy wage-rigidity-based explanations of unemployment fluctuations or models that predict wage rigidity, inlcluding segmented labor market hypotheses.

• Korean Journal of Social Welfare Studies
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• v.43 no.2
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• pp.141-178
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• 2012

Although the rate of self-employment is high in Korean labor market and the rate gap between age groups is high, few studies have addressed on the effects of push factors on transition into self-employment across age groups. The goal of this research is to determine if push factors exert different effects on the self-employment decisions across age groups. There is interest in testing push hypothesis and pull hypothesis. The Korean Labor and Income Panel Study wave 6~11 is used to test this study's hypothesis. The main contribution of the paper is that in case of high unemployment, the probability of transition into self-employment increases. It is consistent with the push hypothesis. Many people are forced to become self-employed person due to the high rate of unemployment and limited occupational choice rather than the role of entrepreneurship. By age subgroup, the transition into self-employment of the ages of 30 and 49 is high. In addition, people at 40-49 years of age are more likely to become self-employed as a response of inadequate job opportunities. It provides the evidence that the self-employment is not a matter of special age group in that people in the 30 to 49 year old age group whose economic activities are vigorous move into marginalized labor market. Furthermore, it seems to be threatened the employment's stability of the prime age in that even people who are age 40-49 years of age are pushed into self-employment because of the recession.

• Journal of Labour Economics
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• v.25 no.1
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• pp.47-74
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• 2002

Since the Economic Crisis at the end of 1997, unemployment rate soared up to the record-high 8.6% (February 1999) and, for youth aged 15~29, it was 14.6% (27.8% for aged 15~19). In spite of economic recovery after the crisis, new participants in labor market at the school-to-work transition have faced with difficulties in finding their first jobs and, even further, the ratio of youth at out-of the labor force but not in school has remained at a higher level. It is important to calibrate the negative effects of nonemployment in the short-run as well as in the long-run, but there has been few study on the school-to-work transition in Korea. This study focus on the nonemployment duration to first job after formal education and comparison of its pattern before and after the crisis. A proportional hazard model, considering job prenaration before graduation (21.4% of the sample), with the semi-parametric baseline hazard is applied to the sample from the Korean Labor and Income Panel Survey(1998~2000) and its Youth Supplemental survey(2000). Interview of the Survey is conducted, by the Korea Labor Institute, to the same 5,000 household and 13,738 individual sample, guaranteeing nationwide representativeness. The Supplemental Survey consists of 3,302 young individuals aged 15 to 29 at the time of survey and 1,615 of them who are not in school and provide appropriate information is used for the analysis. The empirical results show that there exists negative duration dependence at the first three or for months at the transition period and no duration dependence since a turning point of the baseline hazard rate and that unemployment rate reflecting labor demand conditions has a positive effect on exiting the nonemployment state, which is inconsistent with a theoretical conclusion. Estimation with samples separated by the date of graduation before and after the crisis shows that the effect of unemployment rate on the hazard was negative for the pre-crisis sample but positive for the post-crisis sample.

• International Commerce and Information Review
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• v.13 no.3
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• pp.77-95
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• 2011

This paper investigates the relationship between export and economic variables such as trade insurance, world economy activity, relative price, unemployment rate, exchange rate volatility, using monthly data. I employ Johansen cointegration methodology since the model must be stationary to avoid the spurious results. The results indicate that there is a long-run relationship between export and variables. Also, the empirical analysis of cointegrating vector using the CCR, DOLS, FMOLS reveals that the increases of trade insurance has positive relations and the increases of exchange rate volatility have negative relations with export. Especially, DOLS based on Monte Carlo simulations, of this estimator being superior in small samples compared to a number of alternative estimators, as well as being able not only to accommodate higher orders of integration but also to account for possible simultaneity within regressors of a potential system. This paper also applies impulse-response functions to get the additional information regarding the responses of the export to the shocks of the variables. The result indicates that export positively to trade insurance and then decay fast compare with exchange rate volatility. Consequently, trade insurance plays the role of trade policy for export promotion in Korea. Whereas, increase of exchange risk result in reduction of export. Therefore, the support of trade insurance should be expanded and the stabilization of the foreign exchange market must be done for the export promotion.