Changes in the Effect of Education on the Earnings Differentials between Men and Women in Korea (1990-2010)

Abstract

Recently the need for utilizing the capacity of women unemployed is highly emphasized as a counter measure to the expected sharp decrease of labor force due to rapid aging process and low birth rate. However, the economic status of women compared to men does not seem to be matched with the importance and expected role of women. Why do female workers earn much less than male workers? By using the decomposition method, this study analyzed the wage gap between male and female workers in Korea for the past 20 years with focus on the effect of education. The contribution of education differences to gender wage gap decreased constantly since 1990, while that of experience differences increased constantly. For both education and experience, a large portion of the wage gap came from differences in university education and experience level of more than 10 years. This implies that although the proportions of female university graduates and female workers with 10 years of experience or more increased for the past 20 years, there were still large differences in the number of university graduates and workers with high level of experience between male and female workers. Policy measures are required to promote equal pay, employment and promotion to increase the number of females to join and remain longer in the labor market.