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

• KDI Journal of Economic Policy
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• v.34 no.1
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• pp.53-85
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• 2012

This paper empirically investigates the rates of embodied technological change and their relative contributions to total factor productivity growth for manufacturing, using the Korean plant-level manufacturing data for the period of 1985-2003. We adopt a production-based estimation method proposed by Sakellaris and Wilson (2004) in order to examine the marginal productivity increase of each vintage of equipment over time. We find that the rate of embodied technological progress of Korea's manufacturing sector maintains the annual average level of 13.7 percent from 1985 to 2003, slightly lower than 16.9 percent of the U.S., estimated by Sakellaris & Wilson (2004). While the rate recorded a remarkable increase after the 1997 financial crisis, IT-producing and IT-using industries achieved higher rates of embodied technological progress than non-IT counterparts.