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Effects of Initial Labor Market Conditions on Job Polarization: Evidence from South Korea

Author

Listed:
  • Youngsoon Kwon

    (Yonsei University)

  • Myungkyu Shim

    (Yonsei University)

  • Hee-Seung Yang

    (Yonsei University)

Abstract

This paper investigates the extent to which initial conditions in the labor market influence the progress of job polarization in Korea. In particular, we compare the following two competing hypotheses: a specialization hypothesis and an inter-industry wage differentials hypothesis. Our findings indicate that job polarization is pronounced in industries that have historically relied on routine tasks and have experienced a significant increase in ICT capital intensity between 2000 and 2019. By contrast, initial inter-industry wage differentials are not associated with job polarization in Korea during the same period.

Suggested Citation

  • Youngsoon Kwon & Myungkyu Shim & Hee-Seung Yang, 2024. "Effects of Initial Labor Market Conditions on Job Polarization: Evidence from South Korea," Korean Economic Review, Korean Economic Association, vol. 40, pages 219-253.
    • Handle: RePEc:kea:keappr:ker-20240701-40-2-01
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    References listed on IDEAS

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    1. William T. Dickens & Lawrence F. Katz, 1987. "Inter-Industry Wage Differences and Theories of Wage Determination," NBER Working Papers 2271, National Bureau of Economic Research, Inc.
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    3. Guido Matias Cortes, 2016. "Where Have the Middle-Wage Workers Gone? A Study of Polarization Using Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 34(1), pages 63-105.
    4. George J. Borjas & Valerie A. Ramey, 2000. "Market Responses to Interindustry Wage Differentials," NBER Working Papers 7799, National Bureau of Economic Research, Inc.
    5. Lawrence F. Katz, 1986. "Efficiency Wage Theories: A Partial Evaluation," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 235-290, National Bureau of Economic Research, Inc.
    6. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    7. Jeon, Byung-you & Hwang, In Do & Park, Kwangyong, 2018. "Labor Market Duality in Korea and Policy Responses (in Korean)," Working Papers 2018-40, Economic Research Institute, Bank of Korea.
    8. Marco Leonardi, 2015. "The Effect of Product Demand on Inequality: Evidence from the United States and the United Kingdom," American Economic Journal: Applied Economics, American Economic Association, vol. 7(3), pages 221-247, July.
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    Cited by:

    1. Ananiades, Eduardo & Antunes, Daví, 2025. "Transformation in the U.S. Labour Market Artificial Intelligence and Occupational Polarization in the 21st Century," MPRA Paper 125898, University Library of Munich, Germany, revised 2025.

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    More about this item

    Keywords

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    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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