Occupational skills and the gender wage gap in Seoul, Korea: a multilevel approach

Abstract

The purpose of this study was to examine the effects of occupational skills on the gender wage gap in the Seoul metropolitan region, Korea, by employing a multilevel model. To account for the diverse dimensions of skills, we measure workers’ skills using disaggregated measures of occupational skills requirements from the Korea Network for Occupations and Workers data. Using factor analysis, we identify three broad occupational skills categories: cognitive, technical, and physical. The multilevel analysis yields several important empirical results. First, the average occupational wage tends to be higher in occupations that are associated with higher cognitive skills and lower levels of technical and physical skills. Second, the gender effect on wages is larger in occupations requiring higher levels of physical skills and lower levels of technical skills, when controlling for individual- and occupation-level variables. However, the wage penalty associated with technical skills is more severe for women than it is for men, suggesting a significant wage disadvantage for women in occupations associated with technical skills. Finally, in addition to the main effect of the three dimensions of occupational skills, the effect of a greater proportion of female workers within an occupation is significant and negative for all workers, but this effect is less pronounced for men.