Research Monograph Drivers of Part-time Work Growth and Policy Recommendations December 28, 2024
Series No. 2024-07
December 28, 2024
- Summary
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This study examines the causes of part-time work growth in South Korea over the past decade and offers policy insights. Chapter 2 analyzes 2012-2022 data from the Additional Survey by Type of Employment of Economically Active Population Survey and the Survey of Labor Conditions by Employment Type, identifying when and which types of part-time workers increased. The growth, notable during 2016-2019, was primarily driven by older workers, part-time workers with extremely short hours (under 15 hours weekly), and service sector employees. It proposes three hypotheses: (1) workforce composition shifts, including aging and service sector expansion; (2) the adoption of a nonlinear labor cost schedule with a significant discontinuity at 15 hours per week; and (3) the minimum wage increases in 2018-2019.
Chapter 3 employs DiNardo et al.’s (1996) decomposition methodology to assess the contribution of workforce composition changes to part-time work growth. Findings reveal limited explanatory power, as within-group part-time trends dominate and declining youth employment offsets rising elderly employment, suggesting institutional and policy factors as primary drivers.
Chapter 4 analyzes the growth of extremely short-hour work driven by institutional factors affecting labor demand, focusing on a nonlinear labor cost schedule with a significant discontinuity at 15 hours per week (or 60 hours per month). Enhanced compliance with this institutional structure in the 2010s, measured by industry-level variations in social insurance enrollment rates for workers with 60-99 monthly hours, strongly correlates with the growth of part-time workers with very short hours, particularly among new hires.
Chapter 5 conducts an event-study analysis with a continuous treatment variable of the effects of the 2018-2019 minimum wage increases on working hours distribution, finding substantial wage increases for low-wage workers but no clear causal link to the growth of part-time workers with very short hours, which follows the pre-2017 trend. Evidence suggests that this growth likely stems from sustained improvement in compliance with the nonlinear labor cost schedule analyzed in Chapter 4 rather than minimum wage increases.
Chapter 6 concludes with a summary of empirical findings and offers policy recommendations to reduce discontinuities in the nonlinear labor cost schedule at 15 hours per week. Focusing on the Weekly Holiday Allowance, it outlines institutional reform directions and addresses implementation challenges.
- Contents
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Abstract (ENG)
Preface
Executive Summary (KOR)
Chapter 1. Introduction
Chapter 2. Trends and Characteristics of Part-Time Work in South Korea
Section 1. Definition of Part-Time Work and Review of Existing Literature
Section 2. Data Description
Section 3. Trends, Characteristics, and Structural Changes in Part-Time Work
Section 4. Concluding Remarks and Research Agenda
Chapter 3. Drivers of Part-Time Work Growth (I): A Decomposition Analysis
Section 1. Introduction to the Decomposition Methodology
Section 2. Decomposition Analysis of Factors Driving Part-Time Work Growth
Section 3. Workforce Composition and Employment Quality Changes Observed through Decomposition
Section 4. Concluding Remarks and Implications
Chapter 4. Drivers of Part-Time Work Growth (II): Very Short-Hour Workers Exempt from Labor Protections and the Nonlinear Labor Cost Schedule
Section 1. Labor Legislation on Part-Time Work and the Nonlinear Labor Cost Schedule
Section 2. Economic Implications of the Nonlinear Labor Cost Schedule
Section 3. Descriptive Analysis: Nonlinear Labor Cost Structure and Growth of Very Short-Hour Work Using Social Insurance Enrollment Rates
Section 4. Regression Analysis: Nonlinear Labor Cost Structure and Growth of Very Short-Hour Work Using Social Insurance Enrollment Rates
Section 5. Concluding Remarks and Policy Implications
Chapter 5. Drivers of Part-Time Work Growth (III): Minimum Wage Increases and Changes in Working Hours Distribution
Section 1. Literature Review on Minimum Wage and Working Hours
Section 2. Analytical Framework: Effects of the 20182019 Minimum Wage Increases
Section 3. Minimum Wage Increases (2018/2019) and Changes in the Distribution of Working Hours
Section 4. Minimum Wage Increases (2018/2019) and Employment of Older Part-Time Workers
Section 5. Concluding Remarks and Policy Implications
Chapter 6. Conclusion and Policy Recommendations
Section 1. Summary of Empirical Findings
Section 2. Policy Implications
Section 3. Concluding Remarks
References
Appendix
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