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Dual Labor Markets and Labor Productivity: Evidence from the OECD countries (in Korean)

Chung Choe (), Koangsung Choi () and Jieun Lee ()
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Koangsung Choi: Hanyang University
Jieun Lee: Economic Research Institute, The Bank of Korea

No 2018-38, Working Papers from Economic Research Institute, Bank of Korea

Abstract: This paper examines the impact of the dual labor market structure on labor productivity using unbalanced panel data of 29 OECD member countries over the sample period from 1990 to 2015. By using a variety of regression models for panel data (e.g., pooled regression, a fixed effects model and the generalized method of moment), we focus on how the changes in composition among temporary, permanent and self-employed (non-salaried) workers contribute to productivity growth. Although the results slightly differ depending on the estimation method, we find that an increase in the share of permanent workers has the greatest effect in increasing productivity growth. More specifically, productivity growth is significantly slowed by the use of temporary instead of permanent workers, whereas there is little difference in productivity growth when replacing permanent with self-employed workers. This result suggests that an increase in the use of temporary workers could have an adverse effect on labor productivity.

Keywords: Dual Labor Market; Labor Productivity; Permanent and Temporary Workers (search for similar items in EconPapers)
JEL-codes: J20 J21 J24 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2018-12-04
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