Essays in labor and education economics in Korea

Abstract

This thesis provides an analysis of the problems associated with the dual labor market structure and credentialism in Korea. In Chapter 2, I evaluate the effectiveness of an education policy in Korea that regulates operating hours of private tutoring academies, called hagwon, to reduce private tutoring consumption. Since 2009, 16 provincial education offices have placed a restriction on operating hours of hagwon in their ordinances. Since then, some regions have strengthened their initial curfew while the others have maintained the initial curfew. We take advantage of these shifts to identify the treatment effect by using a difference-in-differences estimation. Our findings suggest that strengthening the curfew does not generate a significant reduction in the time and money spent on private tutoring. High school students increased their consumption of alternative forms of private tutoring when their consumption on hagwon type tutoring had to be limited. Chapter 3 examines whether and how labor market duality can be alleviated through legislation that prohibits discrimination based on employment type. In 2007, the Korean government undertook a labor reform banning discriminatory treatment against fixed-term, part-time, and dispatched workers. By exploiting a gradual implementation of the anti- discrimination law by firm size targeting a subset of non-regular workers, I identify the treatment effects of the anti-discrimination law, taking a difference-in-difference-in- differences approach. The results suggest that the anti-discrimination law leads to significant increases in hourly wages and the probabilities of being covered by national pension, health insurance, and employment insurance for targeted non-regular workers in small firms, relative to other workers. The presence of labor unions contributes to reducing gaps in labor conditions between regular and targeted non-regular workers. Chapter 4 studies the union wage premium in Korea. We disentangle the overall union wage effect into the heterogeneous effects by taking different types of non-members groups into consideration. The results show that voluntary non-members experience a marginal wage penalty while the wage penalty for involuntary non-members is substantial. The evidence from quantile regression indicates that wage premium is the highest at the lower decile and is the lowest at the higher decile in the public sector.