The aim of this paper is to project the state of the labor farce and employment in Korea from 2000 to 2005. The labor market in Korea is experiencing significant changes with the rapid development of Information and Telecommunication Technology (ICT) and the transition of the Korean economy into a knowledge-based economy. On the labor supply side, it is expected that the growth of the labor force will be sluggish; baby boomers will become the middle-aged, while the proportion of senior citizens, the highly educated and the female labor force will grow fast. These changes will alter the human resources management system in business sectors. Moreover, the permanent employment relationship, the hierarchy system and the seniority-based wage system are all expected to change. On the labor demand side, the employment share in highly skilled. knowledge-intensive industries will grow faster than the rest of the economy in tandem with the quickly growing output share of these industries. Especially, more jobs will be created in the ICT industries. The proportion of labor in highly skilled and professional occupations will also grow faster than in other occupations. At the same time, the employment share of female workers will grow more quickly than that of the male workers. These changes, however, may worsen income inequalities and/or increase the unemployment rate when workers do not have the suitable skills or knowledge required by the knowledge-based economy. To avoid this, it is necessary for the government to build up a lifetime learning system for workers.
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.
Purpose - Offshoring has emerged as one of the major trends in international trade and has become one of the strategies for achieving competitiveness in the global market. In spite of this, the expected gains of offshoring can be offset by hidden costs and risks, such as those associated with the COVID-19 pandemic, the trade war between the USA and China, and the ongoing trade dispute between Korea and Japan. To obviate such business failure and prevent critical business blunders, offshoring strategies that efficiently consider both risk elements and potential wealth creation are urgently need. The first purpose of this study is to contribute to the development of more advanced offshoring strategies to help host countries select the best locations to manage supply chain risks and create unique value. The second purpose is to specifically analyze the current status of Korea and provide Korean companies with implications to be considered when deciding whether to offshore or re-shore. Design/methodology - A Network DEA model was applied to measure the comparative location efficiency of national competencies for offshoring strategy from perspectives of wealth creation opportunities (profitability and marketability) and supply chain risk management. The location efficiencies are compared among a total 70 countries selected from the Global Competitiveness Index (GCI) and globally attractive locations outlined by Kearney (2017). For the secondary analysis of efficiency, a t-test examining the nature of competitive advantage and the level of sophistication in production processes was implemented in three divisions. We then analyzed differences in offshoring performance in terms of the identified national traits. Moreover, Tobit regression analysis is conducted to investigate the correlation between value-added business activities and each divisional efficiency, seeking to determine how each degree of value-added business activity influences the increase in offshoring productivity. Findings - Regarding overall location efficiency for offshoring performance, only the USA and Italy were identified as being efficient as host countries for offshoring, under circumstances of advanced development, such as productivity and risk management. Korea ranks 13th among 70 countries. The determinants of national competitiveness depend on national traits (the nature of competitive advantage and business sophistication). Countries with labor/resource advantages and labor-intensive industries are more competitive in terms of marketability than others. In contrast, countries with strong technology-intensive industries benefit offshoring companies, particularly in the technology sector, with the added advantage of supply chain risk management. As the perception of a value chain is broader in a country, it can achieve both production sophistication and competitive advantages such as marketability and SCRM. Originality/value - Existing studies focus on offshoring effectiveness from a company perspective. This paper contributes to comparing country efficiency in producing core competencies related to an offshoring strategy and also segments countries into three performance-based considerations associated with the global offshoring market. It also details Korea's position as an offshoring location according to national efficiency and competency.
This paper evaluates the effects of the Basic Subsidy Program provided to families with infants cared for in private day care centers. There has been a discrepancy in the price and quality level between public and private day care centers. Public day care centers which receive government support in their labor costs are able to maintain relatively higher quality at lower price than their private counterparts, while the majority of children are cared for at private day care centers. To reduce the gap of the price and quality of care between public and private day care centers by improving the quality and decreasing the price of private day care centers, the Basic Subsidy Program was introduced in 2006 to the private day care centers. The subsidies mainly aim to improve the quality and the accessibility of child care, and encourage mothers' labor supply. For this purpose, the provision of the Basic Subsidy Program imposed prerequisites to the care providers including minimum wage and four major insurances for teachers, and child-staff ratio. I examine whether the subsidies improve the quality of care, help mothers balancing work and family, and increase satisfaction with child care from mothers' perspective. Since the outcome variables that measure the quality of care are difficult to obtain, I instead use the input variables for quality production. Child-staff ratio, teachers' welfare, and care environment are considered. The relationship between these variables and the introduction of subsidies is examined. The 2004 National Survey of Child Care and Education and the 2004 National Survey of Day Care Centers are used for the base data set. To reflect the outcomes after the Basic Subsidy Program, equivalent data sets for households and care providers are constructed by the KDI Data Analysis Unit. Using these nationally representative data sets, information regarding child care is collected. The findings show that the subsidies contribute to the quality of care improving the input variables of quality production. The welfare of teachers is improved, and the child-staff ratio significantly decreases. As a result, the usage of private day care centers greatly increases even though the price level rarely changes. However, mothers' satisfaction with child care are rarely affected by the subsidies. Although the subsidies with no eligibility criteria enlarge the recipients, the actual effects to increase maternal labor supply or to improve satisfaction is limited. Given this findings, I suggest some modifications of subsidies to raise the effectiveness of the subsidy program.
This research examined the mediation effect of Workforce Agility (WA) on the relationship between environmental uncertainty and operational performance. We manipulated the control variables that are known to be affected by employment flexibility. Employment flexibility is caused by idiosyncratic characteristics of Korean port system. The analysis was tested by Baron & Kenny's method. The result indicates that each path of the proposed model is significant. Furthermore, the mediation effect was checked with the Sobel Test. The research revealed that environment uncertainty poses an indirect effect on operational performance. Both supply/demand uncertainty and technological uncertainty affected operational performance through the mediation effect of WA. Most of the distribution centers located in Busan Newport Distripark are operated in a bimodal labor (human resource) system which includes both permanent employees (workers) and temporary employees (workers). This empirical research provides theoretical and managerial implications by suggesting ways to increase efficiency in distribution center operation through WA enhancement, and to improve the unloading labor system.
The recent increase of wages is considered to be the result of lawsuits on ordinary wage expansion and the reduction of working hours. This may enlarge the wage gap between enterprise and small business, and thus worsen the insufficient supply of workforce to small businesses. Therefore, it is necessary to provide strategies to control the increase of wages in order to resolve the difficulty in the industrial workforce supply and to enforce the industrial competitiveness.
This study analyzes the effect of demographic changes on economic growth. We use the supply-side output identity to forecast the growth potential of the Korean economy. According to the results, even based on optimistic assumptions and prospects, the economic growth rate is likely to fall drastically starting in 2020. Of course, to maintain growth potential, efforts to increase productivity are necessary. However, given the historical experience of developed countries, it is not clear whether the huge trend of demographic change can be offset by efforts to increase productivity. In the so-called '30-50 club' countries, both labor productivity and growth rate tend to fall after reaching the per capita income of $30,000. The degree of decline in the growth rate is closely related to changes in the working age population and the prime-age workforce. The results are similar when tracking the path of changes in total factor productivities of the economy. When a certain level of income is reached, the increase in total factor productivity also tends to slow down. The ripple effects of rapid changes in demographics will indeed be extensive. The negative impact is likely to be concentrated at a time when the working age population, the prime-age workforce, and the total population shrink simultaneously. Above all, it is necessary to use the government's fiscal space to block the possibility of a rapid fall in the growth rate. In addition, it is important to continuously implement various reform tasks that should be promoted, such as improving the education system and strengthening the social safety net.
In the soft drink industry, especially small and medium enterprises in Japan, there is a possibility of conversion from a labor-intensive industry to a capital-intensive. The demand for soft drinks may not be satisfied in the summer because the supply is too low to meet the demand. To address this situation, this paper proposes optimal investment that integrates demand uncertainty, based on real options approach (ROA) and seasonal autoregressive integrated moving average. Two alternative options are compared and evaluated. One is the Bermudan option: to employ additional workers to elevate efficiency in summer and laying off in winter, this attitude is repeated each year. The other is the American option: to replace equipment to increase machine ability throughout the year. Results in ROA show that the highest improvement is gained if the two options are in a symbiotic relationship. Soft drink producers should search for replacing equipment, using the employees repeatedly. A temporary decision is not equal to an infinite decision.
The double dividend hypothesis of environmental taxes has been a very widely debated research topic since its introduction in the mid-80s. Unlike the second generation studies, which stated that the double dividend environmental taxes were impossible to realize, the third generation researchers of today are focused on assumptions or conditions that make the hypothesis viable. The third generation studies state that the double dividend hypothesis is possible through functional form assumptions, such as the characteristics of taxes levied on polluting goods and the overall tax efficiency of the initial tax systems. The most notable, however, is the fact that the working mechanisms of third generation studies, upon closer inspection, give homogeneous effect on the labor markets, although at first glance the third generation studies take seemingly unrelated approaches. This thesis stems from such idea, and it attempts to analyze the effects of environmental taxes on the labor market. After a thorough analysis, the results match the intuition, as the viability of the double dividend hypothesis of environmental taxes largely depends on the effects that policy changes generate on the labor market. In order for the hypothesis to be plausible, environmental tax policies have to increase the labor supply.
Journal of Korean Society of Industrial and Systems Engineering
/
v.36
no.4
/
pp.31-37
/
2013
In this paper, we develop an efficient approach to solve a continuous review inventory system with a budget constraint when the semi-finished product and optional components are required to be assembled. We are, in particular, interested in a budget constraint that includes a service level. The service cost, such as labor and facility costs, tends to increase as the service level increase, and it makes the problem difficult to solve. Assuming that the reorder point for a semi-finished product is given, we show that the order quantity for the semi-finished product and the order quantity and reorder point for optional components can be determined by minimizing the total cost that includes setup cost, inventory holding cost, and shortage cost. The performance of the proposed approach is tested by numerical examples. By using sensitivity analysis, we conclude that, as the reorder point for semi-finished product increases, the order quantity for semi-finished product increases, whereas the order quantity and reorder point of optional components decreases.
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