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Changes in Korean wage inequality, 1980-2005

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  • Changes in Korean wage inequality, 1980-2005
  • Kang, Byung-Goo; Yun, Myeong-Su
  • IZA


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Title Changes in Korean wage inequality, 1980-2005
Similar Titles
Material Type Articles
Author(English)

Kang, Byung-Goo; Yun, Myeong-Su

Publisher

[Bonn]:IZA

Date 2008-10
Series Title; No Discussion Paper Series / no. 3780
Pages 33
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Original Format pdf
Subject Economy < Financial Policy
Social Development < Others
Holding IZA

Abstract

Korea is known not only for rapid economic growth but also relatively low wage inequality. It is one of the few countries in which wage inequality decreased during the 1980s, though in recent years wage inequality has increased. This paper studies what factors contributed to the changes in wage inequality during the last two decades. This paper implements a recently developed Oaxaca-type inequality decomposition method to decompose “U” shaped changes in inequality into characteristics (quantity), coefficients (price) and residuals effects at both overall and detailed levels. The results of decomposition analysis show that changes in the wage structure significantly contribute to the changes in wage inequality in Korea. The coefficients effect of human capital factors has played a major role not only in increasing wage inequality from mid-1990s, but also decreasing wage inequality in 1980s and early 1990s.