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The effects of inward FDI on the skill premium in Korea

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Frame of Image examine industries of which characteristics inward FDI tends to most affect relative employment and wage rates for high skill workers. Thereby, various incentives by policymakers to attract inward FDI should be evaluated and carefully implemented with consideration to its effects on the labor market. Based on the evidence from inward FDI and the labor market in Korea, I argue that the increase in FDI inflow affects the labor
The Effects of Inward FDI on the Skill Premium in Korea
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market only in the case of certain industries, and that one primary characteristic of those industries would be the large volume of initial FDI inflow. I divided the industries into two subgroups, one with a large initial volume of FDI inflow (Group A) and the other with a small initial volume of FDI inflow (Group B). Group A consists of industries such as wholesale/retail, finance/insurance, electricity/electronics, food/accommodation, chemicals, transport machines, machine/equipment, food, and business services. These industries can be characterized by a large volume of initial FDI inflow. For instance, the wholesale/retail industry received USD 340 million, the largest FDI inflow between 1993 and 1995. Meanwhile, the recreation industry in Group B received only USD 5 million, the smallest amount, during the same period. The figure below summarizes the relative employment and earnings of low-skill workers panel (a) and (c) - and high-skill workers - panel (b) and (d) - in two groups. There are cl


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Title The effects of inward FDI on the skill premium in Korea
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Material Type Articles
Author(English)

Han, Minsoo

Publisher

[Sejong]:Korea Institute for International Economic Policy

Date 2016
Journal Title; Vol./Issue KIEP Opinions:
Pages 3
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Direct Investment
Holding KIEP; KDI School