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International trade and within-sector wage inequality: The case of South Korea

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  • Lee, Siwook

Abstract

This paper studies which factors contributed to the changes in wage inequality in Korean manufacturing over the last three decades. By adopting Akerman et al. (2013)’s decomposition method, we examine the relative importance of within-sector and between-sector wage variations in Korean manufacturing over the period of 1980–2012. Our analytic results confirm that within-sector wage variation explains the lion’s share of overall wage inequality. Taking this finding into account, we estimate the impacts of international trade, skilled-biased technological change and labor market conditions on within-sector wage inequality in Korea. Our estimation results suggest that there was a structural change in determinants of wage inequality before and after the mid-1990s. The influence of international trade mainly through heightened import competition on wage dispersion became relatively more conspicuous over the last two decades.

Suggested Citation

  • Lee, Siwook, 2017. "International trade and within-sector wage inequality: The case of South Korea," Journal of Asian Economics, Elsevier, vol. 48(C), pages 38-47.
    • Handle: RePEc:eee:asieco:v:48:y:2017:i:c:p:38-47
    DOI: 10.1016/j.asieco.2016.11.001
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    References listed on IDEAS

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    Cited by:

    1. Thanos Fragkandreas, 2022. "Three Decades of Research on Innovation and Inequality: Causal Scenarios, Explanatory Factors, and Suggestions," Working Papers 60, Birkbeck Centre for Innovation Management Research, revised Feb 2022.

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    More about this item

    Keywords

    Wage inequality; International trade; Technological change; Skill-intensity;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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