• Journal of Labour Economics
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• v.30 no.2
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• pp.87-118
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• 2007

Using KRIVET's Graduates Economic Activities Survey for 2005, this article examines the relationship between university ranking and labor market outcome, with a focus on wage differentials existing between provincial and Seoul metropolitan area university graduates. According to the analysis results, the average monthly wage for provincial university graduates was 1,747.7 thousand Korean won, which is 11.5% lower than that for graduates of universities in the Seoul metropolitan area. School effects on individual wage were estimated to about 12.2% after applying Hierarchical Linear Model technique, which means that university explains only an insignificant part of the total variance in wage among graduates. After controlling for the selection bias, the ability difference between the two areas, by applying the Heckman type 2SLS wage function and Neumark wage differential decomposition technique, the wage gap resulting from the segregation was not identified. This implies that, to a significant extent, the wage gap between provincial and Seoul metropolitan university graduates is attributed to the difference in productivity among individual graduates, rather than to the wage segregation. Also, the estimated wage function by applying Quantile Regression technique indicates that there does not exist any significant wage segregation difference by wage quantile.

• Journal of Labour Economics
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• v.25 no.1
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• pp.97-129
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• 2002

It is well known that the quality of job match has strong influence on the efficient allocation of labor resources in the economy on the macro level and also on the productivity of individual worker. Regarding this point we assumed that the selection of preferred job at the job entry can be interpreted as a subjective indicator of job match quality and tried to estimate the effects of such selection on the wage level. For this purpose we suggested random effects switching regression model and applied this model to the data of the Korea Labor Institute Panel Study from 1998 to 2000. As the results of estimation, we found that there exists large wage differentials at least more than fifty percent caused by such selection. Considering the fact that such wage differentials can not be suitably explained by the traditional reasons of the wage discrimination, we suggest the possibility that there also exists large productivity gap caused by the job mismatch and the necessity of improving the job placement service activity.

• Journal of Labour Economics
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• v.28 no.1
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• pp.61-82
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• 2005

We investigate wage differentials in Korea in the manufacturing industry, as well as factors affecting structural change in wage determination for the pre- and post-financial crisis regimes. We use the 1995 and 1999 data from the Survey Report on the Wage Structure (SRWS) from the Ministry of Labor. Principal components regression analysis is used to tackle multicollinearity. We employ factor analysis to reduce a set of variables to a smaller number, which contain observed and latent variables. Our empirical investigation provide evidences for changes in wages structure between 1995 and 1999. In 1995, the job quality factor is the most critical in the determination of wages, while in 1999, the industry attributes factor impacts greatly on the wages.

• Journal of Labour Economics
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• v.40 no.1
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• pp.1-36
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• 2017

This study aimed to analyze influencing factors to increase the wage differential between large enterprise and subcontracted small-medium enterprises by using panel data composed of 19 manufacturing industries for 16 years from 1999 to 2014. According to the results of analysis, in large enterprises the elasticity of substitution between the labor inputs and the subcontracted product supplies from small-medium enterprises was significantly less than 1. So, the increase in wages of workers of large enterprises, whose degree of employment protection was relatively high, seemed to increase the share of wage cost in total cost and was resulted to decrease the cost share of subcontracted product supplies significantly. This was interpreted to be able to exert a negative influence upon the price of subcontracted product supplies and the wages of workers in subcontracted small-medium enterprises, and, therefore, to increase the wage differentials between large enterprises and subcontracted small-medium enterprises. Furthermore, it was also found that the increases in the labor union participation rate at large enterprises and the openness rate of the industry concerned were contributing to make such effects much stronger significantly. In order to mitigate the wage differentials and the polarizing trend in labor market, we can suggest to establish a certain kind of flexible wage system and to introduce co-bargaining practices with the workers of subcontracted small-medium enterprises within large enterprises, and also for the workers of small-medium enterprises, to prepare new social systems to upgrade their human resources and job skills drastically.

• Journal of Labour Economics
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• v.41 no.4
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• pp.63-105
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• 2018

This paper analyzes the effects of three factors on the firm-size wage premium which have not been considered in previous studies: the worker compositions within firms, the wage differentials between contractors and subcontractors, and the performance pay and rent-sharing behaviors of firms. The main results are as follows. First, even after controlling for the various worker characteristics, the differences in shares of highly educated workers, managers, and professionals between large and small firms make the size-wage premium larger. Secondly, wage differentials between contractors and subcontractors also affect the size-wage premium in the manufacturing sector. Thirdly, high performance pay and active rent-sharing behaviors of large manufacturing firms make the size-wage premium larger. These results imply that a positive matching effect among skilled workers, a structural problem between contractors and subcontractors, and differences in rent-sharing behaviors between large and small firms have affected the firm-size wage premium in the South Korean labor market.

• Journal of Labour Economics
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• v.23 no.1
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• pp.65-80
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• 2000

In this paper We measured average earnings differentials between the government and the private sector, the degree of earnings inequality within each sector, and estimated net earnings differentials between the public and private sector in 1982, 1985, 1990, 1995 and 1998, respectively. According to our estimation results, the public servants in Korea are being more paid than the private sector on the average, and have been enjoying higher net wage premium after controlling variables such as education level, job experience and occupation, etc. In terms of earning inequality within each sector, the public sector was proven to have very narrow earnings differentials between the top and the bottom, compared to quite large differentials in the private sector. Wide recognition that the public servants' compensation is lower in Korea seems quite wrong. The problem to be resolved is the earnings standardization in the public sector and the strong trend toward more equality in recent years. We recommend that the wage gap between the higher rank and the lower rank should be extended, and employment flexibility within the lower positions or ranks of the bureaucracy should be enhanced.

• Journal of Labour Economics
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• v.18 no.1
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• pp.217-239
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• 1995

• Journal of Labour Economics
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• v.15
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• pp.1-35
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• 1992

• Journal of Labour Economics
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• v.24 no.1
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• pp.67-96
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• 2001

The recent economic crisis started at the end of 1997 has brought about changes in labor market practices. One of them is rapid increase in the ratio of workers with alternative employment arrangement, so-called contingent workers. This type of arrangement, unlike traditional employment arrangement, makes employers properly adjust employment to business cycles and it also makes it possible for employees to solve time and spatial constraints related to labor supply. However, recent experience has revealed its negative characteristics such as lower wage rate, deficient fringe benefits, insufficient job security. Using the data from the first and the second wave of the Korea Labor and Income Panel Survey, this study focuses on change in the tendency of being contingent workers and decomposition of the wage differentials among regular and contingent workers by estimating the switching regression model. Results show that the recent crisis significantly contributed to probabilities of being contingent workers, especially for women, the young, the older, and the lowly educated. Decomposition shows that one quarter or one third of 35% of wage differentials are due to the price effect that the same productive characteristics are differently paid by the types of employment arrangements.

• Journal of Labour Economics
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• v.19 no.2
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• pp.161-174
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• 1996

Much of the dual labor markets literature is devoted to exploring the reasons as th why the markets are segmented along the lines where the observed wage differentials are not a result of underlying skill differentials . ; and why otherwise comparable workers different the duration of their job tenure and incidence of unemployment. the logic of competitive economics denies the possibility of equally skilled workers being treated differently in labor markets. The model presented in this paper shows that workers could be segregated quite simply due to the structure of information and job-match quality, even though they are the same in terms of productivity. In general, the model predicts that observability of a worker's productivity and the extent of match specificity are key features of labor market segmentation. An important implication is that the negative from the past labor market experienes, sometimes called as hysteresis effect, helps to restrict mobility of workers among different sectors and results in perpetuation of unemployment in the secondary sector. The model also provides an explanation of the efficient wage scheme in the primary sector.