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Educational Wage Differential in Korea.
... An important reason why the supply of 8 college graduates rose so sharply, particularly during the 1980s, is a series of government measures relaxing quotas on the number of college students. The government had originally imposed these quotas to boost the quality of a college education, reduce the concentration of students in urban centers, and enhance the employment prospects of college graduates (Kwark and Rhee, 1993). ...
... The table further shows a declining wage penalty, especially after 1983, for the occupational percent female, and a declining wage premium after 1980 for being a supervisor. These findings are supported by evidence in Kwark and Rhee (1993), who find that occupational wage dispersion narrowed as occupational mobility in both directions increased. The coefficient estimates also reveal a falling premium for working in a larger firm, which is consistent with findings in Aw and Batra (1996) for Taiwan. ...
This article uses a rich microdata set for 1971 to 1992 that is highly suitable for performing decompositions to explain the trends in Korea's gender earnings differential. Results from a fairly standard cross-sectional decomposition indicate that women's relative progress in observed productivity traits such as education and experience play an important role in the 1983 reversal. However, a large and growing portion of the earnings disparity between men and women remains unexplained. Other developing country studies typically stop here and attribute this growing residual gap to increased wage discrimination by gender. This study uses a more detailed trend analysis to separate changes in market returns to skills, which have little to do with discrimination, from the residual gap. Because men tend to have more education and experience compared with women, any drop in the returns to education and experience causes average male earnings to fall relative to average female earnings. Results from the trend analysis indicate that a strong compression in market returns to skills, combined with narrowing gender differences in education and experience, explain most of the post-1983 catch-up in women's relative earnings.
The Republic of Korea (henceforth Korea) experienced a substantial change in wage differentials in the 1980s. Earnings inequality steadily declined in Korea while it grew in many developed countries. Educational wage differentials expanded in these countries, but fell in Korea (Davis, 1992).
By utilizing occupational wage data in Korea, this paper attempted to find major determinants of occupational wage performance of occupational groups with a combination of cluster and discriminant analysis. This research yielded three major determinants (annual investment, credit availability, and uncovered interest parity) which were also major determinants in a previously undertaken industrial wage analysis. With these major factors, interpretations gleaned from this research confirm research findings from previous research in economics.
During the past two decades, wages of skilled workers in the United States rose while those of unskilled workers fell; less-educated young men in particular have suffered unprecedented losses in real earnings. These twelve original essays explore whether this trend is unique to the United States or is part of a general growth in inequality in advanced countries. Focusing on labor market institutions and the supply and demand forces that affect wages, the papers compare patterns of earnings inequality and pay differentials in the United States, Australia, Korea, Japan, Western Europe, and the changing economies of Eastern Europe. Cross-country studies examine issues such as managerial compensation, gender differences in earnings, and the relationship of pay to regional unemployment. From this rich store of data, the contributors attribute changes in relative wages and unemployment among countries both to differences in labor market institutions and training and education systems, and to long-term shifts in supply and demand for skilled workers. These shifts are driven in part by skill-biased technological change and the growing internationalization of advanced industrial economies.
In the newly industrializing economies (NIEs) of Hong Kong, the Republic of Korea, Singapore, and Taiwan (China), the entire
working population has benefited from labor market institutions. The East Asian NIEs attained and maintained generally full
employment, improved their job mixes, raised real earnings, and lowered their rates of poverty.
This article reaches two principal conclusions. First, labor market conditions continued to improve in all four economies
in the 1980s at rates remarkably similar to their rates of aggregate economic growth. Second, labor market repression was
not a major factor in the growth experiences of these economies in the 1980s. It thus appears that labor market repression
is neither necessary nor desirable for outward-oriented economic development.
This paper investigates movements in relative wages and wage inequality across thirteen of the world's major economies. Focusing on wages received by full-time male workers, the investigation uncovers several empirical regularities: (1) Most advanced industrialized economies show increases, often large. in wage inequality during the 19805; none show declining wage inequality. In contrast. three of four middle income countries considered here show sharply declining wage inequality during the 1980s. (2) Since the early to late 19705, the advanced economies show large and persistent increases in the wages of prime age men relative to the wages of less experienced men. (3) Following a period of sharply declining education differentials in the 1970s, the advanced economies show rising or flat education differentials after 1980. Education differentials fell moderately to sharply in the middle income countries during the 1980s. (4) Wage inequality among observationally similar workers rose sharply during the 1980s in most advanced economies. (5) After 1915, the structure of relative industry wages in the manufacturing sector became increasingly dissimilar across the advanced economies. However. controlling for common time effects, increases in international trade as a fraction of GOP are associated with a partial convergence of relative industry wage structures across countries. The paper discusses several alternative interpretations of wage structure developments in the United States and other countries in the light of these empirical regularities.
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