• 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.

• The Journal of Information Technology
• /
• v.1 no.2
• /
• pp.1-14
• /
• 1998

This paper examines the relationship between unionism and wage dispersion in Korea. This paper presents a model of in which unions, wage, and wage dispersion are simultaneously determined. This paper examine not only the effect of unions on wage dispersion, but also the effect of wage dispersion on the level of unionism. The estimated equalizing effects of unions on within-industry wage dispersion are found to be significant. By increasing 1% in the organized rate of trade unions, Wage dispersion is reduced about 0.05%∼0.11%. But the effect of wage dispersion on the level of unionism is not found.

• The Journal of Asian Finance, Economics and Business
• /
• v.8 no.3
• /
• pp.155-163
• /
• 2021

The study aims to investigate the effect on Philippine occupational choice of House Bill No.7787, also known as the National Wage Law, which was filled by the Philippine Congress that mandates the implementation of an across the board minimum daily wage of Php750.00 to all workers in the Philippines. This study had used the Computable General Equilibrium-Top-Down Behavioral Microsimulation approach to determine the effect of National Wage Law on occupational choice. The results of the study revealed that the implementation of said National Wage Law would affect the distribution of labor force across occupational classification such as wage workers, entrepreneurial farming activities workers, and entrepreneurial non-farming activities workers. This has resulted from a higher utility that will be derived from the wage working sector once the National Wage Law will be implemented. Further, among regions in the Philippines, the Calabarzon, National Capital Region, and Central Luzon had recorded the highest number of workers who prefer the wage income sector. The findings of the study also suggest that the Philippine agricultural sector will be greatly affected by the National Wage Law due to the preference of workers to shift from the entrepreneurial farming sector to belong to the wage sector.

• Journal of Labour Economics
• /
• v.35 no.1
• /
• pp.1-19
• /
• 2012

This paper estimated the first-born effects on wage among wage and salary workers born in 1954 to 1973 with the 2003 KLIPS data set. The first-born effect on wage was estimated as 7.3% with the parsimoniously specified wage function using age and gender. Adding various variables as independent variables, the effects were estimated statistically insignificantly differently, the effect was estimated as 7.6% with adding education, tenure, marital status, father's education, the number of siblings, and health. The effect is not statistically significantly different from that of the parsimoniously specified wage function. We estimated the first-born effects of male, and female wage and salary workers separately. The first-born effects of male wage and salary workers were estimated as 5.9~8.8%. The first-born effects of female wage and salary workers were estimated as 8.8~9.9%.

• East Asian Economic Review
• /
• v.24 no.3
• /
• pp.253-273
• /
• 2020

This paper investigates the impact of the effective minimum wage, defined as the log difference between the minimum and the median wages, on wage inequalities in the OECD countries. Unlike the previous studies that focus on single countries in which the minimum wage has no cross-sectional variation and rely instead on within-country variations of wage distribution across regions or socio-economic characteristics, we use a country panel that allows for both cross-sectional and time-series variations in minimum wage. We also control for more factors than in the previous studies whose absence may cause endogeneity. Our results confirm the previous findings that increases in minimum wage alleviate the wage inequality at the lower tail of the wage distribution, while having little effect at the upper tail. The estimated effect is larger for women than for men, which is consistent with the fact that the share of workers who are directly affected by the changes in minimum wage is bigger among women than men. An application of the IVs of Autor, Manning and Smith (2016) supports the robustness of our findings.

• Journal of Labour Economics
• /
• v.39 no.2
• /
• pp.1-34
• /
• 2016

We estimate the effect of an increase in the minimum wage on employment. In Korea, there is no exogenous variation in the minimum wage across regions or industries. One single minimum wage is applied to every worker in the whole country. In this paper, we exploit arguably exogenous variation in the proportion of workers affected by the minimum wage across worker groups defined by age, sex, education, tenure and establishment size. Using the data from the Survey on Labor Conditions by Type of Employment (SLCTE) from 2006 to 2014, we find that a 1% increase in the minimum wage decreases the full-time equivalent employment by about 0.14%. The effect is heterogeneous across workers; we find the effect is more adverse for female workers, low-educated, younger and older workers, workers with a shorter tenure, and workers in small- and medium-sized establishments.

• Journal of Labour Economics
• /
• v.44 no.1
• /
• pp.31-72
• /
• 2021

This study uses the 12-21st waves of KLIPS to estimate the effect of the increase in the minimum wage on the individual's labor market transition through a multinomial logit. In particular, we examine whether there was an additional effect of the rapid increase in the minimum wage in 2018. The main results of this study are as follows. First, the increase in the minimum wage in Korea is found to have increased the probability of becoming unemployed for both wage workers and self-employed, but there is no additional impact found from the 2018 minimum wage increase. Second, the increase in the minimum wage is found to increase the likelihood of the self-employed entering into wage workers, especially temporary and daily workers. Third, we have found that the increase in the minimum wage in 2018 adversely affected self-employed people with high school education, and significantly lowered young wage workers entering into self-employed. Our results suggest that the recent increase in the minimum wage may be responsible for declining self-employment rate in Korea, and may have a negative effect on the quality of employment because the increase in minimum wage can lead to an increase in temporary and daily wage workers.

• Journal of Labour Economics
• /
• v.40 no.1
• /
• pp.69-97
• /
• 2017

This paper estimates the public and private sector wage gap trend from 2000 to 2014 using 'Korean Labor and Income Panel Study.' We account for unobserved fixed effect by using 1st differencing log wage in order to allow the gap to vary over time. Standard OLS estimates present the public sector wage is 10% higher than private sector on average. Moreover, the public sector wage premium displays the inverted V shape: sharply increasing up to 2006 and decreasing from 2007 to 2014. However, after controlling unobserved fixed effect, the public sector wage premium disappears and does not display the inverted V shape any more.

• Health Policy and Management
• /
• v.30 no.1
• /
• pp.92-99
• /
• 2020

Background: The purpose of this study is to analyze the effect of the income support allowance policy for the care workers on wage level. Methods: The analysis data was constructed using database (DB) of long-term care institution, DB of long-term care personnel status, and DB of health insurance qualification and contribution possessed by National Health Insurance Services. We analyzed the wage status of care workers 2009 to 2016 through basic analysis. We used the difference-in-difference analysis method for the workers who worked in the same institution from 2012 to 2013, The effects of the income allowance policy on wage increase were analyzed. Results: As a result of the net effect of the income support allowance policy, the monthly average wage of the care worker increased by 25,676 won and the hourly wage increased by 478 won. As a result of the analysis, it can be confirmed that the income support allowance policy has achieved some of the goals of raising the wage level of the care workers, and the effect of raising wages for other occupations in the long-term care business can be confirmed. Conclusion: The low wage problem of long-term care workers such as care workers is not the only problem in Korea. In other countries, there are various wage support policies for employees. In particular, it is necessary to refer to the improvement in the treatment of care workers in Japan and wage pass-through in the United States. In addition to wages, there is a need to promote policies to provide employment motivation through efforts to improve their social status and improve their job status and career development for employees in long-term care facilities.

• Journal of Labour Economics
• /
• v.40 no.3
• /
• pp.105-131
• /
• 2017

This study analyses the effect of a minimum wage on employment by using the government's progressiveness as an instrumental variable. The Ordinary Least Squares regression (OLS) can result in upward biased employment effect due to the endogeneity among variables. Therefore, it is necessary to analyse the casuality that removed endogeneity between variables by using proper instrumental variables. The analysis using instrumental variable shows that the growth of the increasing rate of the minimum wage reduces employment. The negative effect of employment depending on the increase of minimum wage corresponds with the predictions of Neoclassical Economics.