Joonmo Cho

Entry dynamics of self-employment in South Korea

The purpose of this paper is to clarify whether the entry into self-employment was an inevitable move due to economic recession (push hypothesis) or a voluntary move due to entrepreneurship (pull hypothesis) in Korea. It also examines how this decision is affected by changes in socio-economic conditions. The empirical analysis in this study exploited the matched sample for the adjacent months in the Economically Active Population Survey (EAPS) conducted by Korea National Statistical Office in 2000–2004. The empirical results showed that the push aspect of self-employment was strong in Korea over the whole sampled periods. The entry into self-employment in South Korea is largely attributable to economic sluggishness and an increase in unemployment rather than a voluntary transition resulting from entrepreneurship. Policy environment (such as providing information and financial support for new start-ups after the Asian financial crisis), which is a country-specific factor magnified the pushed effects. For the pushed (unprepared) self-employed people, not only is there a need to expand the coverage of vocational training programmes, but also it is vital that social safety nets are strengthened and supplemented.

Affirmative Action and Corporate Compliance in South Korea

Abstract The Affirmative Action Act was introduced in South Korea in 2006 to increase female employment and correct discriminatory hiring practices. Using the combined data sets of survey and the Acts implementation plan, this paper provides logit estimation results to examine empirically how political perceptions or attitudes of firms influence corporate noncompliance with the Act. According to a corporate personnel manager survey, affirmative action was initially pursued as a campaign pledge by the liberal party (the Korea Democratic Party) to attract womens votes, and took on a looser shape as the government compromised with the business sector after an election. A weak enforcement structure ultimately diluted the effects of the Act. A logit analysis indicates that noncompliance is more probable in companies that perceive affirmative action as part of a design to achieve political goals, and compliance is more probable in companies that feel it is likely to improve corporate management.

Employment Problems with Irregular Workers in Korea: A Critical Approach to Government Policy

the past decade, market forces have become an increasingly dominant factor in determining employment relations patterns in industrialized economies. In the context of growing global competition, deindustrialization and rapid technological innovation, firms have tried to reshape existing employment relations in a market-driven direction. Management has taken a variety of strategic actions to unbundle corporate structure and to externalize employment relations by resorting to outsourcing, spin-offs, and the increasing use of irregular labour.1 In particular, employers have expanded the use of irregular labour, such as temps, part-timers, temporary help-agencies or contract labour, on-call labour, and independent contractors, in order to seek cost reductions and more flexibility, and sometimes avoid the organizational reach of existing unions.2 The share of irregular workers in the total labour force of Korea has grown from 43.4 percent in 1996 to 52.7 percent in 2005. In Korea, there has been rapid growth in the irregular labour force, representing an externalizing trend in employment relations. Existing research literature on this topic has focused on the definition of irregular labour, its magnitude, working conditions, and background factors influencing its growth. Less attention has been paid to the impact social security systems have on managements use of irregular workers. The essential purpose of any social security system is to establish a minimum level of welfare which can be universally applied to all workers. Governments must focus on creating policies that aim to minimize workplaces excluded from the social security system. Our study offers an analysis of the influence of the social security system on employment relations in Korea. We particularly focus on how employers

Gender exclusion in social security protection: evidence from Korea

This study provides an evaluation of the impact of Koreas stratified labour market on the gaps in wages and social security coverage using the raw data from the supplementary surveys conducted by the Korean National Statistics Office. The study confirms the existence of a labour market stratified by employment type/gender/unionised or non‐unionised/firm size. The labour market structure is not only reflected in the distribution of wages but also in the social security coverage. The empirical result suggests that gender and employment type are the key variables determining the likelihood of social security exclusion. With the other conditions controlled, the female worker has a 65 per cent likelihood of exclusion, and the non‐standard worker has a 40.9 per cent likelihood. For female non‐standard workers, the situation is worse. Their likelihood of exclusion from social security soars to 80.1 per cent. The empirical results with respect to other fringe benefits not mandated by law exhibit the same pattern of social security exclusion. The empirical results emphasise the limitations of gender policy intended to rectify gender discrimination or exclusion alone and suggest a matrix policy that takes into consideration the complex labour market structure.

Gender and Job Turnover in the Dual Labor Market: A Korean Perspective

Abstract This study analyzes gender differences in job turnover and performance in the Korean labor market by using a combined dataset consisting of the Ninth and Tenth year waves of the KLIPS (Korean Labor & Income Panel Study). The results of this empirical analysis show that the female workers in the dataset had a higher turnover rate, by a margin of 9.5 percent compared to male workers. Further, the results suggest that voluntariness and change in employment type are key variables that determine the direction of wage changes. If the turnover was involuntary and separated from regular jobs, the accompanying wage loss will be the greatest among all forms of voluntary turnover. The wage loss of involuntary female turnover separated from regular jobs was much greater than the wage loss of the comparable male turnover. This may be because the involuntary female turnover from regular jobs is likely to be a movement from the core labor market to the peripheral labor market. The estimation results with respect to the determinants of wage changes also suggest that turnover, resulting in a change in market structure, has a greater impact on the wage change than the occupation or industry change within the same core or peripheral market. Even if it is generally true that personal characteristics are important determinants in wage changes, in the process of turnover productive traits such as education and work experience in a large firm reward male turnover more so than female turnover.

Gender difference of the informal sector wage gap: a longitudinal analysis for the Korean labor market

Unlike previous studies focusing on either market structure or gender earning gap separately, this study considers market structure as a more crucial factor in determining the gender earning gap. The estimated wage differentials between sectors from the fixed-effects (FE) model demonstrate a substantial drop in the size of wage gaps, reflecting systematic sorting between formal and informal sectors by unobserved workers’ abilities. While estimated wage differentials from cross-sectional analysis between formal and informal sector among male workers disappear in the FE estimations, the wage gap between the formal and the informal sector among female workers still exists in the FE estimations, thus suggesting a differing dual labor market severity between gender groups. Based on these empirical results, we discuss a policy direction involving simultaneous consideration of the dual structure of the labor market and gender discrimination.

Dismissal law and human resource management in SMEs: Lessons from Korea

The Korean economy was severely affected by the Asian financial crisis of 1997, which culminated in Korea requesting emergency financial assistance from the IMF. To fulfill the conditions set by the IMF, in February 1998, the Korean government passed dismissal law allowing firms to more readily dismiss permanent workers for managerial reasons. The results of our empirical analysis demonstrate that the incidence of unjust dismissal after the adoption of the new dismissal law soared and was much more prominent in small- and medium-sized enterprises (SMEs) than in larger organizations, while it failed to achieve its intended objective of creating greater employment flexibility. The 1998 dismissal law has had an important effect on contemporary human resources practices. Since 2000, employers have frequently bypassed the rigidity of the dismissal law for permanent workers, both by hiring non-standard workers and by outsourcing. Moreover, legal interpretations of the laws have gradually changed to render the d...

A Comparative Study on Retirement Process in Korea, Germany, and the United States: Identifying Determinants of Retirement Process.

This study classifies the retirement process and empirically identifies the individual and institutional characteristics determining the retirement process of the aged in South Korea, Germany, and the United States. Using data from the Cross-National Equivalent File, we use a multinomial logistic regression with individual factors, public pension, and an interaction term between an occupation and an education level. We found that in Germany, the elderly with a higher education level were more likely to continue work after retirement with a relatively well-developed social support system, while in Korea, the elderly, with a lower education level in almost all occupation sectors, tended to work off and on after retirement. In the United States, the public pension and the interaction terms have no statistically significant impact on work after retirement. In both Germany and Korea, receiving a higher pension decreased the probability of working after retirement, but the influence of a pension in Korea was much greater than that of Germany. In South Korea, the elderly workers, with lower education levels, tended to work off and on repeatedly because there is no proper security in both the labor market and pension system.

Who teaches economics courses better?: using student–professor matched data for the principle of economics course

This study investigates the influences on student evaluation of teaching of the principle of economics course using the student–professor matched data, which combines students’ course evaluations and professors’ research performance. The results indicated that professors with better research performance, majored in applied rather than theoretical economics and using global standard textbooks received higher course evaluations than otherwise.

The impact of epidemics on labor market: identifying victims of the Middle East Respiratory Syndrome in the Korean labor market

BackgroundThe vulnerability approach suggests that disasters such as epidemics have different effects according not only to physical vulnerability but also to economic class (status). This paper examines the effect of the Middle East Respiratory Syndrome epidemic on the labor market to investigate whether vulnerable groups become more vulnerable due to an interaction between the socio-economic structure and physical risk.MethodsThis paper examines the effect of the Middle East Respiratory Syndrome epidemic on the labor market by considering unemployment status, job status, working hours, reason for unemployment and underemployment status. In particular, the study investigates whether the U-shaped curve becomes a J-shaped curve due to the interaction between medical vulnerability and labor market vulnerability after an outbreak, assuming that the relative vulnerability in the labor market by age shows a U curve with peaks for the young group and middle aged and old aged groups using the Economically Active Population Survey. We use the difference in difference approach and also conduct a falsification check and robustness check.ResultsThe results suggest that older workers faced a higher possibility of unemployment after the Middle East Respiratory Syndrome outbreak. In particular, they experienced higher involuntary unemployment and underemployment status as well as decreased working hours. It was confirmed that the relative vulnerability of the labor market for older workers was higher than for the other age groups after the epidemic outbreak due to the double whammy of vulnerability in the medical and labor market. The vulnerability in the young group partially increased compared to the 30s and 40s age groups due to their relative vulnerability in the labor market despite being healthy. We find that assuming the relative vulnerability in the existing labor market shows a U shape with age increase, the U-shaped curve became J-shaped after the outbreak.ConclusionsDisasters like epidemics can occur unexpectedly and affect certain groups more than other. Therefore, medical protection should be enhanced for groups vulnerable to disease and economic measures are also required for the protection of their livelihoods in the labor market to prevent unemployment stemming from inequality.