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BOK Working Paper No.2018-41, Minimum Wage and Employment Structure : Evidence from Korean Industry-Level Data

Economic Research Institute (82-2-759-5343) 2018.12.14 3606

Title : Minimum Wage and Employment Structure : Evidence from Korean Industry-Level Data

Author : Heon Jae Song(University of Seoul), Hyunjoon Lim(BOK), Woori Shin(University of Seoul)


<Abstract>


This study analyzes the linkage between minimum wage and employment structure. As a result, rising ratio of the workers below minimum wage and who are affected by it turns out to lead to increases in the ratio of irregular workers to regular ones and wage gap between the two groups, but with only limited magnitudes.

Furthermore we find that minimum wage hike negatively affects working hours and monthly wage. Although the impacts have been minimal, it is likely that the impact for this time turns out to be different from the previous cases, given the recent drastic minimum wage hike. Our study is meaningful in that we investigate empiric relationship between minimum wage and employment structure by using the data and analysis methodology differentiated from the existing research in circumstances where there is mounting concern as to the impact of rapid increases in the minimum wage.

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