IWER
Understanding South Korea’s Gender Gaps in Employment and Wages
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What factors explain the large differences in employment rates and wages between men and women in South Korea? That’s a question explored in a paper by MIT Sloan Assistant Professor Anna Stansbury, Jacob Funk Kirkegaard of the German Marshall Fund, and Harvard University Professor Karen Dynan that was published earlier this year in the journal Applied Economic Letters.
In their paper “Gender gaps in South Korea’s labour market: children explain most of the gender employment gap, but little of the gender wage gap,” the researchers note that South Korea has one of the largest gender wage gaps in the OECD. What’s more, the country’s gender employment gap is also well above average for OECD nations: South Korean women have a labor force participation rate that is 20 percentage points below their male counterparts. To uncover the reasons for this, the authors used data from the Korean Labour Income and Panel Study, a longitudinal study.
The analysis by Stansbury, Kirkegaard, and Dynan finds that the labor market gender gaps in South Korea primarily affect women over 30—suggesting that caring for children may be an important contributing factor. To explore the effects of caregiving, the authors compared the labor market participation experiences of men to those of three different groups of women: women with children, unmarried women with no children or elderly people in their household, and women with no children but at least one person in their household who is over 65. Their conclusion? The gap between women and men’s participation in the labor force in South Korea is indeed “primarily a phenomenon for women with care responsibilities.”
In South Korea, the authors find, “women’s likelihood of working falls substantially with the arrival of their first child and increases again only very slowly in the five years following the birth.” Stansbury, Kirkegaard, and Dynan observe that women in South Korea “face a particularly stark work-family trade-off” that combines the expectation that mothers will spend lots of time caring for their children with workplaces where work hours are “relatively long and inflexible.”
However, the researchers find, children play “a significantly smaller role” in the gap between men and women’s wages and the gender gap in the likelihood of being employed in a regular job, rather than in some type of informal work arrangement. Unmarried South Korean women with no children still are paid almost 20 percent less than same-aged men working in the same industry and occupation. The authors note that gender discrimination could be a factor in the gender gaps in wages and the holding of regular jobs.
Stansbury, Kirkegaard, and Dynan conclude that their findings “underscore the importance of continuing to improve work-family balance through changes in government policies, organizational practices, and family dynamics—in Korean and other countries struggling to raise female participation” in the paid labor force. They observe that the problem is particularly acute in South Korea, as lack of good work-life balance options for working mothers may be contributing to the country’s very low birth rate.
Stansbury is the Class of 1948 Career Development Assistant Professor and an Assistant Professor of Work and Organization Studies at the MIT Sloan School of Management, where she is in the core faculty of the MIT Institute for Work and Employment Research (IWER). Kirkegaard is a senior fellow with the German Marshall Fund of the United States, and Dynan is a Professor of the Practice in the Harvard University Department of Economics and at the Harvard Kennedy School. All three authors are also nonresident senior fellows at the Peterson Institute for International Economics.
