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Labor market reform and wage inequality in Korea

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  • Labor market reform and wage inequality in Korea
  • Kim, Hyeon-Kyeong; Scott, Peter
  • University of Massachusetts Amherst


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Title Labor market reform and wage inequality in Korea
Similar Titles
Material Type Reports
Author(English)

Kim, Hyeon-Kyeong; Scott, Peter

Publisher

[Amherst, U.S.]:University of Massachusetts Amherst

Date 2014
Pages 23
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Social Development < Employment
Holding University of Massachusetts Amherst

Abstract

Temporary workers make up a sizeable part of the labor force in many countries and typically receive wages that are significantly lower than their permanent counterparts. This paper uses an efficiency wage model to explain the wage gap between temporary and permanent workers. High-performing temporary workers may gain promotion to permanent status, and a high wage to permanent workers therefore serves a dual purpose: it affects the effort of both permanent and temporary workers. Applying the model to the Korean experience, we discuss the effects of the labor market reforms in 1998 on inequality.