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Relationship regarding the demand for labor between domestic temporary and foreign workers: Korean case

Author

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  • Kwon, Chul-Woo
  • Chun, Bong Geul

Abstract

With the progress of globalization, South Korea, one of the emerging industrial countries, has recently witnessed a sharp increase in the number of enterprises that employ foreigners. However, there are only a limited number of studies on the influence that such an increase has had on the labor market in the Republic of Korea. Thus, using ‘Workplace Panel Survey’ data surveyed by the Korea Labor Institute (KLI), this paper examines the relationship concerning the labor demand of an establishment between domestic temporary and foreign workers. Analysis using a bivariate Tobit model shows that a typical Korean firm attempts to employ domestic temporary and foreign workers simultaneously. Further, the empirical analysis found that any establishment that is relatively newly established and has difficulty in recruiting domestic workers hires foreign workers, but there is no evidence that establishments hire foreign workers rather than domestic temporary workers to save on the production cost.

Suggested Citation

  • Kwon, Chul-Woo & Chun, Bong Geul, 2011. "Relationship regarding the demand for labor between domestic temporary and foreign workers: Korean case," Japan and the World Economy, Elsevier, vol. 23(4), pages 240-245.
    • Handle: RePEc:eee:japwor:v:23:y:2011:i:4:p:240-245
    DOI: 10.1016/j.japwor.2011.10.001
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    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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