• Journal of Labour Economics
• /
• v.30 no.3
• /
• pp.77-102
• /
• 2007

This paper compares income and consumption for their relative effectiveness in measuring inequality. Although income inequality has received more attention in the literature, the permanent income hypothesis links consumption to welfare more directly than income. To the extent economic agents smooth their consumptions, consumption inequality is a better indicator for an economy's welfare inequality, and it is especially so when income volatility is high. The empirical analysis in this paper indicates that the income and consumption patterns among the Korean wage/salary worker households are quite consistent with the permanent income hypothesis. Further, it is found that consumption inequality tends to be lower than income inequality, and more importantly, that the two inequalities do not always vary in the same direction. These results call for stronger emphasis on consumption inequality in inequality literature.

• Journal of the Korea Academia-Industrial cooperation Society
• /
• v.18 no.12
• /
• pp.494-502
• /
• 2017

This study examines how the Netherlands and Denmark lowered the increase in income inequality, at a period in time when income inequality in the world was deepening. This study investigates the level and trend of income inequality in the Netherlands and Denmark compared to those in Korea, the United States, Germany and Sweden. Using the method of the decomposition of changes in income inequality, this study identifies which factors are associated with the changes in inequality in these countries. It also explores which labor market policies mitigated inequality in these two countries. One of the major reasons for the reduction in earned income inequality in the Netherlands is the increased participation of women in economic activity through the increase in voluntary part-time working. In particular, the policies designed to promote equal treatment between full-time and non-regular workers contributed to the active participation of women in part-time work. Using active labor market policies, Denmark improved the proficiency of low skilled and low-wage workers, thereby alleviating the wage gap between high-income and low-income workers. Based on the experiences of the Netherlands and Denmark, this study discusses policy directions to mitigate income inequality in Korea.

• Journal of Labour Economics
• /
• v.42 no.1
• /
• pp.43-72
• /
• 2019

As a result of decomposing the wage gap between large enterprises and SMEs using Oaxaca's wage gap decomposition method, the total wage gap of supply side factors was 44.2%, and the service years and educational background were the biggest influences. and As a result of decomposing the wage gap by firm size based on demand side factors such as business performance, total wage gap was 44.9%, and the influence on wage gap was in the order of labor productivity, union and outsourcing ratio. The results of this analysis suggest that it is necessary to consider the demand side factors such as business performance and capital structure of supply side companies such as differences in human capital in order to solve wage gap by firm size.

• Journal of Labour Economics
• /
• v.39 no.4
• /
• pp.31-56
• /
• 2016

This study analyzes the effect of a minimum wage on the wage compression within Korean establishments. The results are as follows. Firstly, increases of a ratio of workers who get minimum wage within establishments have a effect to compress the wage distribution within establishments. Secondly, the establishment average wages get lower as their minimum wage ratios get larger. In this situation, high wage group's wages fall deeply than low wage group's these. Thirdly, the relative wages of high wage group to low wage group tend to be small as their minimum wage ratios get larger. To conclude, a increase of minimum wage has a effect to raise low wage workers' wages directly, and to reduce high wage workers' wages or increase rates indirectly. And the wage distributions are compressed as a result. So government's policy to increase minimum wage will have a result in reducing wage inequality.

• Korean Journal of Labor Studies
• /
• v.24 no.2
• /
• pp.29-59
• /
• 2018

This paper examines the achievements and limitations of the Moon Jae-In administration's first-year policies on non-standard employment in the public sector of Korea. The most remarkable achievement was that the transition rate of non-standard to standard positions reached the highest historical level of 42.1 percent, mainly by including for the first time temporary agency workers as a target of those policies. There also have been many steps taken to relax the qualification for transition, reduce the number of exception clauses, and expand union participation. In contrast, policy measures to address problems of low wages and inequality were very limited and not significantly different from those of previous administrations. As a result, the success of the policy paradigm shift pursued by Moon's administration will be determined by how aggressive measures are being taken in the next policy steps to improve such problems of low wages and inequality.

• Journal of Labour Economics
• /
• v.44 no.2
• /
• pp.71-90
• /
• 2021

This paper examines the effects of COVID-19 on the working hours and wages by employment types of wage workers. Using the Economically Active Population Survey-Supplementary Survey by Employment Types(2017-2020), I found that due to COVID-19, non-regular workers reduced their working hours more than regular workers, shrinking their opportunities to generate wage income. During the same period, the working hours and wage gap between new regular and non-regular workers widened, this was largely in part-time and short-term workers. As the working conditions change based on the initial level, these results show that efforts to improve their(new and short term workers) working conditions can contribute to mitigating labor market inequality.

• Journal of Labour Economics
• /
• v.37 no.3
• /
• pp.45-73
• /
• 2014

This study analyzes the effect of labor unions in Korean manufacturing industry on wage variance of men from 1988 to 2012. The results are as follows. Firstly, the wage variance within establishments is higher than that between establishments, and the wage variance between establishments in the non-union sector has increased significantly compared to that in the union sector since 2000. There is strong evidence that the latter is due to the solidarity wage policy of unions which has strengthened since the early 2000s. Secondly, the influence of labor unions on the wage structure within the union sector has gotten stronger recently despite the general drop in the labor union membership. Thirdly, since the mid-1990s labor unions have contributed to reducing the overall wage variance. It implies that decline in the unionization rate over the years in Korea is likely to have contributed to increasing wage inequality.

• Journal of Labour Economics
• /
• v.40 no.4
• /
• pp.1-31
• /
• 2017

Recent empirical studies highlight the importance of between-firm or between-establishment factors in rising wage inequality. Examining the establishment-level data from the Mining and Manufacturing Survey of 2000-14, this paper finds that overall between-establishment wage dispersion has increased in Korea. However, unlike other OECD countries, the divergence occured in the lower tail of the wage distribution. Dispersion in labor productivity exhibits a similar movement, therefore explains the widening wage dispersion. In contrast, the link between wages and total factor productivity is much weaker, which appears to be associated with inefficient capital reallocation. I also find much heterogeneity in the productivity-wage relationship across productivity distribution. The most productive establishments turn the smallest portion of productivity gains into wage increases.

• Korean Journal of Labor Studies
• /
• v.23 no.2
• /
• pp.79-108
• /
• 2017

Using data sets from the Korean Labour and Income Panel Study (KLIPS) for the period 2003-2015, this study shows that wages of nonunion workers are positively related to the percentage of unionized workers in the same geographic region. A 10 percentage point increase in a region's union density is associated with a 4.9 percent increase in the region's average wage of nonunion workers. It is also shown that this positive spillover effect is observed for various subgroups of nonunion workers, including women, youth, low-educated workers, small firm employees, and those employed under nonstandard work arrangements. In contrast, the average wage of union workers is found to respond insignificantly to changes in a region's union density.

• 사회경제평론
• /
• v.31 no.3
• /
• pp.239-270
• /
• 2018

This study empirically analyzed the labor income share of primary and subcontractors. The results are as follows. First, panel regression analysis showed that the variables of transaction concentration, outsourcing cost, capital intensity, and market share had a significant negative effect, while union organization rate and R & D investment had positive effects. In particular, the R & D variable had a negative effect on the share of labor income in the year of investment (t), but had a positive impact on the long-term (t-1, t-2). Second, the share of labor income during the last 11 years (2006~2016) was higher in subcontractors with lower wage levels. This analysis implies that the wage inequality between the primary and subcontracting enterprises can not be eliminated without improving the solvency of subcontractors.