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Labor Market Reforms, Temporary Workers and Wage Inequality

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  • Hyeon†Kyeong Kim
  • Peter Skott

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.

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  • Hyeon†Kyeong Kim & Peter Skott, 2016. "Labor Market Reforms, Temporary Workers and Wage Inequality," Metroeconomica, Wiley Blackwell, vol. 67(2), pages 313-333, May.
    • Handle: RePEc:bla:metroe:v:67:y:2016:i:2:p:313-333
    DOI: 10.1111/meca.12122
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    Cited by:

    1. Thanh Tam Nguyen-Huu, 2023. "Wage Inequality in Pakistan: How Does Contract Status Matter?," Post-Print hal-04248144, HAL.

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