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China Effects on Labor Markets in Korean Manufacturing Industries: Empirical Analysis (in Korean)

Author

Listed:
  • Taegoo Kwon

    (Department of Public Finance and Social Policy, Korea Development Institute)

  • Nakil Sung

    (Department of Economics, University of Seoul)

  • Minchang Kim

    (Economy and Industry Research Office, National Assembly Research Service)

Abstract

This study examines the effects of Korea's trade with China on labor markets in Korean manufacturing sector, especially the number of employees and the average wage levels in Korean manufacturing industries. The empirical analysis is carried out with applying panel data models to a panel of 42 Korean manufacturing industries for the period between 1991 and 2013. Empirical results show that an increase in the total amount of export(import) tended to increase(decrease) the number of employees in the manufacturing industries, with no significant effects on the average wage levels. This result maintains, irrespective of firm sizes. In addition, the results suggest that Korea's export to and import from China tended to increase the number of employees in the manufacturing industries, with Korea's export to China increasing the average wage levels. Changes in the estimation method may affect some results of the study, but do not support the allegation that the number of employees in the Korean manufacturing industries dropped due to a steady increase in the amount of import from China. The results provide empirical evidence on the view that Korea's trade with China has led the Korea's economic growth, and support the prediction that the Korea-China Free Trade Agreement will contribute to sustainable growth in the Korean manufacturing sector.

Suggested Citation

  • Taegoo Kwon & Nakil Sung & Minchang Kim, 2017. "China Effects on Labor Markets in Korean Manufacturing Industries: Empirical Analysis (in Korean)," Economic Analysis (Quarterly), Economic Research Institute, Bank of Korea, vol. 23(1), pages 82-118, March.
    • Handle: RePEc:bok:journl:v:23:y:2017:i:1:p:82-118
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    More about this item

    Keywords

    Korea's trade with China; China effect; Manufacturing sector; Labor markets; Korea-China FTA;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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