Determinants of Inter-Industry Wage Differentials in Korea

Abstract

The purpose of this study is to analyze the sources of inter-industry wage differentials in the Korean context. In this study, we examine what causes the inter-industry wage differentials in the manufacturing sector and how they have changed over the last three decades in Korea. The results of our study imply that the industry policy has contributed to inequality of earnings. In addition, Such industry characteristics as the average years of schooling and the proportion of female workers in the industry contribute to the persistence of wage differentials across industries in Korea. These results will make a valuable contribution to more accurately assessing the role of the government in the labor market, the issues of income distribution and unemployment.