 Can mandatory local-talent hiring policy reduce regional starting wage gap? Causal evidence from Korean graduatesSungjae Oh and Hanol Lee Economic Analysis and Policy, 2024, vol. 84, issue C, 208-229 Abstract: This study investigates the impact of Korea's mandatory local-talent hiring policy on regional starting wage disparities between non-Seoul Metropolitan Area (non-SMA) and Seoul-based university graduates. We use a difference-in-differences approach with micro-level data from Korean university graduates between 2010 and 2019. Our findings demonstrate that the policy has significantly reduced wage disparities by creating demand for skilled graduates from non-SMA universities, particularly benefiting those from top-ranking institutions. This demand has driven them to enhance their educational standards, leading to improved rankings and average GPAs. Our mechanism analysis confirms that these improvements are crucial in narrowing wage disparities. Interestingly, the treatment effects are stronger for humanities graduates compared to those in science and engineering. These findings offer valuable insights for policymakers seeking to promote balanced regional development in similar contexts. Keywords: Mandatory local talent-hiring policy; Starting wages of graduates; Balanced regional development; Regional wage disparities; Korea (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:84:y:2024:i:c:p:208-229 DOI: 10.1016/j.eap.2024.08.028 Access Statistics for this article Economic Analysis and Policy is currently edited by Clevo Wilson More articles in Economic Analysis and Policy from Elsevier |
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