Do anti-discrimination laws alleviate labour market duality?

Purpose - This paper examines whether and how labour market duality can be alleviated through legislation that prohibits discrimination based on employment type. Design/methodology/approach - In 2007, the Korean government undertook a labour reform banning discriminatory treatment against fixed-term, part-time and dispatched workers. By exploiting a gradual implementation of the anti-discrimination law by firm size targeting a subset of non-regular workers, the paper identifies the treatment effects of the anti-discrimination law, taking a difference-in-difference-in-differences approach. Findings - The results suggest that the anti-discrimination law significantly increases hourly wages and the probabilities of being covered by national pension, health insurance, and employment insurance for targeted non-regular workers in small firms relative to other workers. Anticipatory behaviours of employers and selective transitions of employees in response to the implementation of the anti-discrimination law do not underlie the estimated effects. The presence of labour unions contributes to reducing gaps in labour conditions between regular workers and targeted non-regular workers. Originality/value - The main contribution of this paper is to provide empirical evidence on causal impacts of equal pay legislation on the gaps in labour conditions between different categories of workers, using a difference-in-difference-in-differences estimation.