Labor Market Behavior in the Republic of Korea: An Analysis of Wages and Their Impact on the Economy

摘要

Throughout the extensive discussions of the determinants of Korean economic success, one factor is noticeably absent. Attention is rarely called to the supportive role that the Korean labor market has played over the last twenty years. Certainly one of the lessons of the Korean experience is the contribution a responsive labor force can make to economic growth. In this paper, recent macroeconomic events serve as a backdrop to examining a variety of aspects of the Korean labor market. The evolution of the wage structure of Korea's formal economy is analyzed according to sectoral dimensions as well as worker and firm characteristics. In addition to analyzing issues concerning wage trends and wage structure, aspects of Korean compensation systems and employment contracts are examined. The economic implications of the extensive system of nonbasic-wage payments, i.e., bonuses and allowances, are reviewed as is the notion that Korean enterprises rely on Japanese-style permanent employment contracts. (Copyright (c) The International Bank for Reconstruction and Development, 1984.)