Wage Inequality Dynamics and Trade Exposure in South Korea

Baybars Karacaovali and Chrysostomos Tabakis

No 201619, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: South Korea has experienced a great U-turn in its inequality trends during the past few decades. In this paper, we explore the role of international trade in its wage inequality dynamics over the 1998. 2012 period, using a unique household panel survey. Our analysis reveals that most of the overall wage inequality occurs within sectors and educational groups rather than between them. However, the share in total inequality of the "between" variation across sectors and educational groups has moderately increased over time. Furthermore, we document that almost the entire aggregate wage inequality in both manufacturing and services occurs within different trade exposure categories rather than between them, and this pattern is persistent through time. These results suggest that international trade might not be the main driving force behind the rising wage dispersion in South Korea in the last two decades.

Keywords: Wage inequality; trade exposure; South Korea (search for similar items in EconPapers)
JEL-codes: E24 F14 F16 J31 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-int
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http://www.economics.hawaii.edu/research/workingpapers/WP_16-19R.pdf First version, 2016 09 (application/pdf)

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Journal Article: Wage inequality dynamics and trade exposure in South Korea (2017)
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