본문 내용으로 건더뛰기
Advanced search
KDI Policy Forum
Wage Inequality: How and Why it has Changed over the Decades

August 22, 2019

  • Author Youngsun Koh
  • Series No. KDI Policy Forum No. 274 (2019-03), eng.
  • Language English
PDF
KDI Policy Forum
Wage Inequality: How and Why it has Changed over the Decades

August 22, 2019

  • Author Youngsun Koh
  • Series No. No. 274 (2019-03), eng.
  • Language English
PDF
    1. Changing Trends in Income and Wage Inequality

    2. Decomposition of Wage Inequality

    3. Changes in the Relative Labor Supply and Demand by Educational Attainment

    4. Discussion

    5. Policy Implications
■ From 1980 to 2016, Korea exhibited ups and downs in wage inequality and a slowdown in wage
growth.

- Wage inequality fell in the 1st phase (1980-1994), rose in the 2nd (1995-2007), and fell again in the 3rd (2008-2016).

- The annual growth rate of the real median wage plummeted from 9.2% in the 1st phase to 4.0% in the 2nd and then to 1.1% in the 3rd.

■ So far as wages are a form of compensation for the skills provided, wage inequality is affected by the changes in the supply of and demand for skills.

- An important indicator of skill is the educational attainment of workers. The demand for high-school graduates rapidly increased in the 1st phase, weakening the wage premium of college graduates and reducing wage inequality. The situation reversed in the 2nd phase with a sharp upturn in the demand for college graduates, in their wage premium, and in wage inequality. In the 3rd phase, the wage premium of the latter dipped again as their supply continued amid the subdued demand for them.

- The large demand for high-school graduates observed in the 1st phase may derive from the rising demand for mid-skilled workers by the heavy and chemical industry while the growing demand for college graduates observed in the 2nd phase may be the result of an increasing demand for high-skilled workers driven by technological progress.

■ To accelerate the wage growth while keeping wage inequality in check, technological progress should be encouraged and the quality of higher education upgraded.
 
Share to email
보안코드
CHECK Send to email address!
Office of Global Economy
Providing Economic Forecast and Macroeconomic Policy Direction, the Groundwork for a Brighter Future

The Department of Macroeconomics is conducting researches on the macro economy and macroeconomic policy, particularly focusing on suggesting the analysis of macroeconomic trends and current status of the economy at home and abroad, the economic forecast, and the policy direction of the macro economy. The Department is also in charge of establishing, sustaining and maintaining various econometric models, based on which it analyses policy effects and develops a long-term economic forecast.

Main Tasks
  • Economic trend analysis, short- and long-term forecast
  • Policy study on macroeconomic management
  • Basic structural analysis on macroeconomic areas
  • Maintenance of multi-sectoral dynamic macroeconomic model
Department of Macroeconomic Policy
  • LEE. Tae Suk

    Director, Division of Analysis and Evaluation

    82-044-550-4725
  • CHO, Byungkoo On leave

    Director and Vice President, Department of North Korean Economy

    82-044-550-4725
  • LEE, Jongkyu

    Fellow

    82-044-550-4725
  • WEE, Hyeseung Dispatched

    Research Associate

    82-044-550-4725
  • NAM, Jinwook On leave

    Specialist

    82-044-550-4725
  • KIM, Seulki

    Research Associate

    82-044-550-4725
  • CHUN, Eunkyung

    Research Associate

    82-044-550-4725
Contact email address

We reject unauthorized collection of email addresses posted on our website by using email address collecting programs or other technical devices. To access the email address, please type in the characters exactly as they appear in the box below.

Contact email address
Contact email address