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Impact of regulating non-regular employment on firm's employment decisions

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Impact of regulating non-regular employment on firm's employment decisions04



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Title Impact of regulating non-regular employment on firm's employment decisions
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Material Type Videos
Author(English)

Korea Development Institute

Publisher

[Sejong] : Korea Development Institute

Date 2018-11
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Social Development < Employment
Holding Korea Development Institute
License

Abstract

In 2017, the government began making efforts to convert the employment status of workers in the public sector from non-regular to regular, in order to ease the duality of the labor market. So, is this possible in the private sector? To convert non-regular workers into regular workers in the private sector, an environment must be created in which firms are encouraged to take the initiative. Accordingly, KDI conducted an analysis on the impact of the non-regular employment protection law in 2007 on the employment decisions of private firms. Since the enactment of the non-regular employment protection law, firms are obligated to convert fixed-term workers to non-fixed term after two years. Firms are also prohibited from discriminating against fixed-term works. So, what has happened to the employment in firms? Despite an increase in the share of regular workers, there has been a decline in total employment while the use of other non-regular workers not protected by the law, such as contract workers, has also increased. In addition, firms without a labor union experienced a relatively large increase in the number of regular workers while those with a union saw a marked rise in that of other non-regular workers. Then, what are the thoughts of the firms themselves regarding the regulations? KDI questioned the CEOs of 1,000 randomly selected firms about their intentions to convert the status of fixed-term workers to non-fixed term or regular as well as their treatment of them.