S-Space College of Social Sciences (사회과학대학) Institute of Economics Research (경제연구소) Seoul Journal of Economics Seoul Journal of Economics vol.25 no.1~4 (2012)
Wage Inequality and the Contribution of Capital, Differential Labor Quality and Efficiency to Economic Growth in Korea, 1965-2007
- Kwack, Sung Yeung
- Issue Date
- Seoul Journal of Economics, Vol.25 No.1, pp. 1-23
- We show that skilled and unskilled labors are imperfect substitutes
and that capital and skilled labor are complementary in production.
The Korean economy has experienced skill-biased technical
changes. The capital stock growth is found to be the main source of
the economic growth. The contribution of the efficiency and labor
input growth of skilled workers is the second most important source.
The rate of contribution of TFP growth to GDP growth has increased
from 27% in 1991-1996 to 36% in 2001-2007. This paper shows
that Koreas policy of educating its workforce has boosted productivity
and growth and it prevented a widening in wage inequality.