5Kim_2

8/3/2019 5Kim_2

http://slidepdf.com/reader/full/5kim2 1/30

EFFECTS OF THE LABOR MARKET STRUCTURE ON

EMPLOYMENT TRANSITIONS IN SOUTH KOREA

KIM SUNGHOON

Seoul N ational University

This study examines the value that employers and workers place on stable employment and that workers place on more desirable transition outcomes, as modified by variousindividual and structural factors, particularly the labor market structure. Results of the analysis show that the internal labor market structure has increased employment

stability and the desirability of transition outcomes in Korea over time. This means that Korea’s industrialization has enabled the internal labor market structure to matureenough to increase employment stability and the desirability of transition outcomes.They also show, however, that the internal labor market structure has had little influ-ence on the ways in which other factors affect employment stability and the desirabilityof transition outcomes. This implies that Korea has experienced industrialization insuch a short period that the internal labor market structure has not matured enough toinfluence the ways in which other factors affect employment transition patterns.

Results of the effects of the labor market structure and other factors on employment transition patterns imply that Korea’s industrialization has had mixed effects on work-ers’ economic and social well-being. On the one hand, it has improved the overall level

of workers’ well-being; on the other hand, it has increased heterogeneity in well-beingamong different types of workers.

Key Words: Internal Labor Markets, External Labor Markets, Employment Stability, Desirability of Transition Outcomes

INTRODUCTION

Social mobility h as been a m ajor topic of sociological research. One of themost important forms of social mobility that has been studied is labormobility: workers’ movements between jobs, workplaces, occupations,ind ustries, and regions. Labor m obility affects workers’ econom ic and socialwell-being significantly because i t usually accompanies considerablechanges in their w orking conditions and social environm ents. Furth ermore,workers’ life chances, life styles, and subjective well-being are more influ-enced by long paths of socioeconomic rewards associated with long-termpatterns of labor mobility than by socioeconomic rewards at a particularpoint in time (Sørensen , 2001). An employee’s leaving h is or her workp lace,called an employment transition in this study, has a significant influence onhis or her economic and social well-being, as it usually entails conspicuous

DEVELOPMENT AND SOCIETYVolume 33 Num ber 1, Jun e 2004, pp. 93~122

8/3/2019 5Kim_2


changes in earnings and working conditions, loss of earnings, or distur-bances in various other life conditions. This study seeks to address explana-

tions of emp loyment tran sitions.Two aspects of employment transitions that bear on workers’ economic

and social well-being are employmen t stability and the d esirability of transi-tion outcomes. Employment stability is important for both employers andworkers. For employers, workers’ frequent separations result in a high levelof labor management costs and losses of workers’ firm-specific skills,knowledge, and experiences that increase labor productivity and profits.For w orkers, unstable employment u sually leads to u nstable and un pre-dictable life conditions that decrease overall quality of life. It is important,

therefore, to study individual and structural factors that influence stableemp loyment. The d esirability of transition outcomes is importan t for work-ers who leave their workplaces. Although workers generally prefer stableemp loyment to un stable emp loyment, they leave their workplaces voluntar-ily in order to increase their economic and social well-being, or involuntari-ly under various circum stances that th ey cannot avoid. When w orkers leavetheir workplaces, an important factor is the economic and social desirabilityof new destinations. It is important, therefore, to investigate individual andstructural factors that cause desirable transition outcomes. It needs to be

noted that th ese two asp ects of employment transitions are closely related toeach other and constitute a two-stage process experienced by a worker, vol-untarily or involuntarily. In the first stage, whether a worker leaves his orher workplace influences his or her economic and social well-being. In thesecond stage, the destination at which a worker arrives after he or sheleaves his or her workplace also influences his or her economic and socialwell-being . These tw o stages are closely related to each other in that the sec-ond stage is cond itional on the first stage. I will explore the factors that h aveinfluenced the two aspects of employment transitions in the context of

South Korea (hereafter Korea) — a country that has experienced rapid eco-nomic development for the last four decades. The factors affecting the ratesof employment transitions consist of various ind ividual and structural fac-tors. By controlling for other individual and structural factors, this studywill focus on the labor market structure, its changes over time, and its inter-actions w ith other individu al and stru ctural factors.

There are four reasons for choosing the labor market structure as the keyfactor in this study. First, I expect that the labor market structure plays acrucial role in shaping long-term patterns of employment transitions. In

fact, some types of labor market structures, such as an internal labor marketstructure, which will be discussed in d etail later, are devised for the p urp ose

94 DEVELOPMENT AND SOCIETY

8/3/2019 5Kim_2


of playing such a role (Sørensen, 2001). It is necessary to examine whetherthese structures actually fu lfill their intend ed goa l.

Second, the labor market structure can interact with other factors in influ-encing the rates of employment transitions. By investigating these interac-tions, I will make clear the effect of the labor market stru cture on d ifferencesin employment stabil i ty and in the desirabil i ty of transit ion outcomesamon g various typ es of Korean workers.

Third, the p roportion of urban emp loyees has d ramatically increased as aresult of rapid economic development in Korea since the early 1960s. Thismeans th at in the Korean labor market, the relationship between labor sup -ply and labor demand has fundamentally changed. By acknowledging the

basic importance of the labor market for working people’s economic activi-ties and earnings, one also acknowledges the importance of labor marketstructure and its changes over time in understanding the mechanisms bywhich emp loyment tran sitions occur.

Four th, despite such imp ortance, the labor market stru cture in Korea hasrarely been considered in research on various types of labor mobility oremp loyment transitions. One of the main contributions of this stud y is to fillthis research gap.

THEORETICAL MODELS

The labor market is the space where workers’ labor pow er is exchangedfor financial reward, so that the labor market structure refers to the way inwhich such exchanges occur. This study focuses on two aspects of the wayin which these exchanges occur: (1) the relationship between jobs, and (2)the way in which workers are matched to jobs. First , the relat ionshipbetween jobs in a labor market can be either hierarchical or horizontal interms of authority given to occupants of each job; it is also characterized by

whether or not jobs are differentiated based on levels of skills and knowl-edge. Second, an organ ization matches workers and jobs by external recruit-ments, internal movements, or some combination of the two. Theories of internal labor markets help specify these aspects of labor market structuresystematically.

Doeringer and Piore (1985: 1-2) define an internal labor market as “anadministrative unit, such as a manufacturing plant, within which the pric-ing and allocation of labor is governed by a set of administrative rules andprocedures.” Althauser and Kalleberg (1981: 130) furth er specify the internal

labor market structure as “( a) a job ladder, with ( b) entry port only at thebottom and ( c) movement u p th is lad der.” A job ladd er is a hierarchy of jobs

EMPLOYMENT TRANSITIONS IN KOREA 95

8/3/2019 5Kim_2


requiring different levels of skills and knowledge. It does not necessarilyentail entry port only at the bottom or movement u p this ladd er, i.e., inter-

nal promotions on this ladder. This is because it is possible that each posi-tion in a hierarchy of jobs requiring different levels of skills and knowledgecan be filled with workers outside an organization. The second criterion of internal labor markets, entry port only at the bottom, does not necessarilyimply the existence of a job ladder, for entry port can also be limited to thebottom of a hierarchy of jobs with the same level of skills and know ledge; itshou ld, however, imp ly movement u p a hierarchy of jobs with either d iffer-ent levels or the same level of skills and know ledge. The purpose of limitingentry port only at the bottom, therefore, is to facilitate internal promotions

(Althauser an d Kalleberg, 1981: 130). The th ird criteria, interna l p romotionsin a h ierarchy of jobs, do n ot necessarily imply the existence of a job ladderbecause they can occur in a hierarchy of jobs with the same level of skillsand knowledge; but they must entail entry port only at the bottom if everyposition except the p osition at the bottom of a hierarchy of jobs is filled onlyby internal promotions.

In sum , in ord er to d efine a labor market as an internal labor m arket, oneneeds to first identify a hierarchy of jobs requiring different levels of skillsand know ledge, then either (1) entry p ort only at the bottom of this hierar-

chy of jobs or (2) each position, excluding the position at the bottom, filledonly by in terna l promotions in th is hierarchy of jobs. In th is stud y, therefore,an internal labor market is defined as a labor market that has a job ladder,i.e., a hierarchy of jobs requiring different levels of skills and knowledge,with entry port only at the bottom or with internal promotions as the onlyway of filling every position except the entry port position. 1 In contrast, anexternal labor market is defined as a labor market that consists of jobsrequiring similar levels of skills and know ledge or as a labor m arket wherethe entry port is located at any level of posit ions and some posit ions,

exclud ing the position at th e entry port, are filled by external recruitments.The most important subtypes of an internal labor market that have been


1 Information on whether a labor market has a job ladder, however, is not available in thedata used in this study. A job ladd er is identified with interna l promotions in this stud y. Thisidentification is indirectly sup ported by some information in the d ata. The d ata contains twoquestions related to the existence of a job ladd er for workers em ployed at the time of the sur-vey: one about forma l training and th e other about job transfer throu gh a job rotation system.It turns ou t that th e majority (75.20%) of workers, who w ere emp loyed at the time of the sur-vey and had been promoted at their current workplaces, had received formal training or hadexperienced job transfer. In this study, unless otherwise specified, a job ladder means a jobladder with entry port only at the bottom or with internal promotions as the only way of fill-ing every p osition, except the entry port position.

8/3/2019 5Kim_2


proposed so far are a firm internal labor market and an occupational inter-nal labor market. If an internal labor market exists within a firm, it is called

an enterp rise market (Doeringer an d Piore, 1985: 2-3) or a firm in ternal labormarket (FILM). If an internal labor market exists within an occupation, it iscalled a craft market (ibid.: 3-4) or an occupational internal labor market(OILM). Only a few studies have been done on the effect of internal labormarkets on employment stability. Using the personnel records of a largeAm erican insur ance comp any from 1970 throu gh 1978, Petersen an dSpilerman (1990) demon strate that the p romotion rate is negatively associat-ed w ith the separation rate. From th is result, I suggest that emp loyment sta-bility is higher in internal labor markets than in external labor markets, for

there are generally more p romotions in internal labor markets than in exter-nal labor m arkets. Yoo (1996) show s that internal labor markets red uce labormobility in Korea when three indicators for an internal labor market aremet: screening devices for hiring, internal promotion ladders, and a highprop ortion of new entry at the bottom level.

On the basis of the conceptualizations of internal labor markets and theresul ts of the s tu d ies presented above, this s tud y argu es that Koreanemp loyees in internal labor markets show higher emp loyment stability thantheir counterparts in external labor markets. I suggest that the underlying

mechanism th at translates experience in internal labor markets into higheremployment stability is as follows. Employers in internal labor marketsbelieve that the efficient operation of job ladders contributes to increasedprofits by increasing labor productivity. Workers in internal labor marketsbelieve that more promotion opportunities that job ladders provide lead toincreases in w ages and improvements in w orking conditions. Employers ininternal labor markets try to enh ance the efficiency of job ladders to increaseprofits, and workers in internal labor markets attemp t to take advantage of promotion op portun ities to earn higher wages and work u nd er better work-

ing conditions. On the p art of employers, redu cing em ploymen t transitionsby providing higher wages and better working conditions for workers inhigher positions on job ladders is helpful for the efficient operation of jobladders. 2 On the part of employees, remaining at their current workplaces


2 This suggestion is in line with the main themes of the various efficiency wage models(Yellen, 1984; Katz, 1986; Lang and Dickens, 1994). Most efficiency wage models assume thathigher wages lead to higher profits. This assumption is based on the assumption that laborprod uctivity and outp ut d epend on w ages. In efficiency wage mod els, one of the intermed iatefactors by which wages influence labor productivity and output is the quit rate. In otherwor ds, efficiency wage m odels suggest that higher w ages increase labor produ ctivity and ou t-pu t by redu cing w orkers’ quits.

8/3/2019 5Kim_2


for as long as possible is necessary for taking advantage of promotionopportunities job ladders provide. As a result, employment relationships

are more stable in internal labor markets where job ladders exist than inexternal labor markets wh ere they do not.

This study will also argue that the Korean employees in internal labormarkets show m ore desirable transition ou tcomes than their coun terparts inexternal labor markets. I suggest that th e un derlying mechanism that trans-lates experience in internal labor markets into more desirable transition out-comes is as follows. Promotions on job ladders in internal labor marketsenable workers who are p romoted to accum ulate more material, intangible,or social assets that lead them to more desirable workplaces once they leave

their current workplaces, as compared with the structure of external labormarkets. Three reasons why more material, intangible, or social assets arehelpful for moving to better workplaces are: (1) More material assets (suchas earnings) enable workers to have more means and time to find better des-tinations. (2) More intangible assets (such as skills and knowledge that arerelated to w orkers’ job p erforman ce) can help th em to find workplaces p ro-viding higher w ages and better working cond itions. (3) Workers with moresocial assets (such as networks of interpersonal ties) have the advantage of find ing better w orkplaces m ore easily, since the d ominant way of matching

individuals to employers is the use of interpersonal ties (Tilly and Tilly,1998: 140; Marsden and Gorman, 2001). Material, intangible, or social assetsacquired at the current workplace are especially valuable for transitions toentrepreneurship because entrepreneurship usual ly requires a largeramou nt of such assets than th e other destinations.

In order to specify further the mechanism for a more desirable transitionoutcome, I classify destinations of employment transitions as (1) entrepre-neurship, (2) new employment in internal labor markets, (3) self-employ-ment, (4) new employment in external labor markets, and (5) nonemploy-

ment. These are ordered from the most to the least desirable destinations foremp loyees wh o leave their workp laces.

Entrepreneu rs are employers hiring at least more than several workers tooperate their bu siness. For emp loyees, moving to entrepreneurship is m oredesirable than moving to any other destination. Employees think of entre-preneurship as an opportunity to pursue the greatest economic success,although it is usually difficult to become an entrepreneur (Casson, 1982:347). 3 Furthermore, entrepreneurship provides the best chance to improve


3 In this study, I define entrepreneurs as employers hiring at least five workers. I assumethat the business of employers hiring less than five workers is usually for subsistence ratherthan entrepreneurial.

8/3/2019 5Kim_2


working conditions, especially autonomy in work such as work flexibility,opportunities for creativity, and control over work. The fact that entrepre-

neurship provides the best chance to increase autonomy in work has beenpointed out by theories on en trepreneurship . The m ost influential theorist of entrepreneurship is arguably Schumpeter (Barreto, 1989: 22-33; Martinelli,1994; Ripsas , 1998; Swedberg, 2000; Blaug, 2000; Brouwer, 2000) .Schump eter (1949, 1976) sees entrep reneurship as the key agent of economicdevelopm ent. According to h im, an entrepreneur is an innovator w ho intro-du ces new p rodu cts , new method s of produ ct ion , new marke t s , newsources of producer goods, or new organizations. Other aspects of the activerole of entrepreneursh ip in economic activities have also been pointed out.

Kirzner (1973) views an entrepreneur as an arbitrageur who establishesmarket equ ilibrium by being alert to and captu ring un noticed p rofit oppor-tunities that already exist. According to Casson (1982: 23), “an entrep reneu ris someone who sp ecializes in taking judgmen tal decisions abou t the coordi-nation of scarce resources.”

Nonemp loyment comprises un employment, in wh ich p eople do not w ork but search for jobs, and includes those out of the labor force. Generally


TABLE 1. EXAMPLES OF WORKING PEOPLE FOR EACH EMPLOYMENT STATUS

Employment status Examples

Employers hiring five or more employees.* Owners of Entrepreneurship m ed iu m- to large-sized restau rants, su perm arkets, groceries,

bookstor es, etc. Emp loyers of private firms.

Employees wh o have been promoted or have the prospect of Em ploym en t in in tern al bein g p rom oted . Male wh ite-collar workers w ho have grad u

labor markets ated from college. Male blue collar workers w ith implicitguaran tees of long-term emp loyment and p romotion.

Ow n accoun t workers.** Emp loyers hiring less than fiveSelf-employment employees. Owners of small restaurants, groceries,

bookstor es, etc. Street ped dlers selling v ariou s miscellaneou sgoods on their own.

Em ploym en t in extern al Em ployees w ho h ave n eith er been prom oted nor h av e th elabor markets prospect of being p romoted . Female blue-collar workers who

have not grad uated from college.

* In the d ata u sed in th is study, 69 emp loyees, each of w hom had one w ork spell, became entrepre-neur s, and only 11.59% of them hired 30 or m ore emp loyees.

** In the d ata u sed in this stud y, there w ere 561 transitions from emp loyment to self-emp loyment,and 72.91% of these transitions involved emp loyees becoming own accoun t w orkers.

8/3/2019 5Kim_2


speaking, nonemploymen t is the least desirable destination employees findthemselves in once they leave their workp laces, because m oving to n onem-ployment usually means the loss of income, at least for a short period of time.

One of the key differences between the effects of internal labor marketsand those of external labor markets is that wages are higher and workingconditions are better in internal labor markets than in external labor mar-kets. In other words, internal promotions on job ladders in internal labormarkets are usually associated with increases in wages and improvementsin w orking conditions. This is because employers in internal labor m arketsinvest more in workers, anticipating that prospects of internal promotionson job ladd ers make w orkers more likely to stay w ith them, so that th ey canelicit higher p rodu ctivity from w orkers in the long ru n. It is obvious that foremployees who have left their workplaces, new employment in internallabor markets is more desirable than new employment in external labormarkets. Self-employment falls between these two. 4 This is because self-


TABLE 2. SUBJECTIVE APPRAISAL OF OWN INCOME AND SOCIAL STATUS CLASSES BYEMPLOYMENT STATUS: KOREA, 1996

Subjective appraisal%

Employment status Ow n income class* Own social status class*(n = 2,618)

Mean Median Mean Median

Entrepreneurship 4.82 5 4.76 5 2.59

Employment in4.58

5 4.645 26.02

internal labor markets (0.143) † (0.497)

Self-employment4.35

54.28

4 27.11(0.005) † (<0.0005) †

Employment in 4.244

4.254 44.28

external labor markets (0.181) † (0.701) †

* From 1 to 10: 1 is the lowest class and 10 is the highest class (See Questions e151 and e152 inApp end ix A).

† P -level for the difference between the figure in th is cell and th e figu re in the on e-row-above cell.Note: All statistics are w eighted by the variable designed to ma ke the sam ple nationally representa-

tive (For th e definition of the w eighting v ariable, see Ap pen dix B).

Source: East Asia Social Survey on People’s Work Life: South Korea (See the DATA AND METH-

ODS section).

4 The self-employed consist of own account workers and employers hiring less than five

8/3/2019 5Kim_2


emp loyment jobs are usu ally not as good as jobs in internal labor markets interms of subjective socio-economic status, earnings, and working condi-tions, whereas workers in external labor markets are likely to regard self-emp loyment as a desirable path that will allow them to pu rsue greater eco-nom ic success outside their current em ploymen t relations. This is especiallytrue in Korea, which has a significant self-employment sector, in large partconsisting of the self-emp loyed wh o d o not hire any employees.

The desirability of transition outcomes primarily concerns the subjectiveappraisal of employment statuses. Therefore, in order to justify empiricallythe above ranking of employment transit ion outcomes, the subjectiveapp raisal of employment statuses needs to be investigated first. If informa-tion on the subjective appraisal of employment statuses is not enough for


TABLE 3. ACTUAL ANNUAL INCOME AND WORKING HOURS BY EMPLOYMENT STATUS:KOREA, 1996

Ann ua l income includ ing tax* (10,000 Korean wo n)Weekly w orking

Employment Continuous Categoricalhours

status% Category % %

Mean Median ( n = Mod al containing ( n = Mean ( n =% 1,673) category median 782) 2,531)

Entrepreneurship 2,686.54 3,000 2.673,000- 2,100-

3.24 57.87 2.654,999 2,999

Employment ininternal labor

1,866.631,800 31.66

1,500- 1,500-20.20

50.9126.54

markets(<0.0005) † 2,099 2,099 (<0.0005) †

Self- 2,026.112,000 23.83

900- 900-41.76

64.2426.17

employment (0.021) † 1,499 1,499 (<0.0005) †

Employment inexternal labor

1,554.821,500 41.85

900- 900-34.80

55.8444.64

markets(<0.0005) † 1,499 1,499 (<0.0005) †

* Respondents answered only one question out of the question about their continuous income andthe qu estion abou t their categorical income (See Question s c111 and c11av1 in Ap pen dix A).† P -level for the d ifference between the figure in th is cell and th e figu re in the on e-row-abov e cell.Note: All statistics are weighted by the weighting variable.

Source: Same as in Table 2.

workers in th is study. The reason for considering the latter as self-employed w as discussed inFootnote 3.

8/3/2019 5Kim_2


assessing the desirability of transition outcomes, then material conditions of employment statuses should also be considered. Table 1 shows typical

examples of working people for each one of the emp loyment statuses men-tioned above, except non emp loymen t. Tables 2 and 3 present some statisticsrelevant to socio-economic status, income, and working hours by employ-ment status for working people in Korea in 1996. More specifically, Table 2presents the subjective appraisal of own income and social status classes,and Table 3 presents actual average annual income and average weeklyworking hours.

The statistics in Table 2 imply that entrep reneurship and emp loyment ininternal labor markets are more desirable destinations than self-employ-

ment and emp loyment in external labor markets. It is true that th ere are fewdifferences in th e subjective appraisal of own income and social status class-es between entrepreneurs and workers in internal labor markets andbetween th e self-emp loyed and workers in external labor markets. The sta-tistics about the actual average annual income in Table 3, however, implytha t en t repreneu rship an d se lf-emp loyment a re more des i rab le thanemployment in internal labor markets and employment in external labormarkets, respectively. Although the continuous annual average income issmaller for emp loyment in internal labor m arkets than for self-emp loyment,

the categorical annu al income is greater for the former. Besides, one can saythat w orking conditions are better for the former because w orkers in inter-nal labor markets work much less hours than the self-employed. We can say,therefore, that w e have some convincing evidence sup porting the claim thatfor Korean emp loyees, emp loyment in internal labor markets is more d esir-able than self-emp loyment.

In sum , I present the following hyp otheses in th is study.

Hypothesis 1: Workers in firm internal labor markets show higher employ-ment stability than workers in external labor markets.

Hypothesis 2: Workers in occupational internal labor markets show higher employment stability than workers in external labor markets.

Hypothesis 3: Workers in firm internal labor markets show more desirabletransit ion outcomes than workers in external labor markets.

Hypothesis 4: Workers in occupational internal labor markets show moredesirable transition outcomes than workers in external labor markets.

DATA AN D METHODS

The data analyzed in this study are from the East Asia Social Survey on


8/3/2019 5Kim_2


People’s Work Life: South Korea (hereafter the East Asia Social Survey). 5

The Korean sample of the East Asia Social Survey is a rep resentative sam ple

of the entire nation except Jeju Island, and contains respondents’ retrospec-tive work histories and information on various time-constant and time-varying factors that may have influenced their emp loyment tran sitions. Thepop ulation was men an d wom en aged 25 to 60 in 1996.

The observation u nit and the time u nit of the original data from the EastAsia Social Survey are an ind ividu al and a year, respectively. To investigatefactors that have influenced employment stability, the original data weretransformed into event h istory d ata, the observation un it of wh ich is a per-son-year. The unit of analysis for the event history data is a work spell.

Calendar years for the w ork sp ells range from 1949 to 1996. The even t h isto-ry data contains 2,397 individuals, 3,505 work spells, and 21,098 person-years. The d ata for investigating factors that have influenced the desirabilityof transition ou tcomes w ere created by keeping only the last person-years of the 2,375 work spells that are not right-censored in the event history data.The second data, therefore, includes only 2,375 observat ions.

The method of analysis for the data containing all 21,098 person-yearsmust be appropriate for time-varying, as well as time-constant variables.Event history methods satisfy this requirement, and will be used in this

study. The data containing only the last person-years of the 2,375 work spells that are not right-censored w ill be analyzed by ordered logit m odels,also known as proportional odds models. Event history methods consist of discrete- and continuous-time models. Discrete-time models, rather thancontinuous-time models, are appropriate for the event history data in thisstudy for the following reasons. First, the unit of employment duration inthe event history data, a year, is coarse. Second, discrete-time modelsassume that we know only that an event occurred within a given interval.Specifically, discrete-time binom ial logit models will be fit to th e event h isto-

ry data.In order to investigate factors that have influenced employment stability,

overall employment transition rates need to be estimated using a main-effects binomial logit model and an interaction binomial logit model.Suppose that π t is the conditional probability that an employee leaves aworkplace in the current year t , given that he or she has not left the work-


5 The questionnaire for the East Asia Social Survey was jointly designed by the Institute forSocial Development Studies at Yonsei University in Korea, the Academia Sinica in Taiwan,and the National Opinion Research Center associated with the University of Chicago in theUnited States.

8/3/2019 5Kim_2


place yet. Then , a main-effects binomial logit mod el to be fit to the event h is-tory data is

log[(π t / (1-π t )] = α + β Τ X

where α is a baseline logit, β Τ is a vector of coefficients to be estimated, and X is a vector of time-constant and time-varying covariates, which consist of individual-, structure-, and time-level independent variables. An interactionbinomial logit m odel assum es the same form, except th at interaction termsbetween the variable for labor market structure and the other independentvariables are also included in X . An assum ption for this interaction mod el is

that including such interaction terms should improve the fit of the main-effects binomial logit m odel.

In order to investigate wh ether or not th ere is any d epend ence of emp loy-ment transition on employment duration, dummy variables for employ-ment d uration w ill be includ ed in X in both the main-effects and the interac-tion mod els. If these dumm y variables are includ ed, α is a baseline logit atthe reference time interval. Dummy variables for cohort will also be includ-ed in X in both mod els in ord er to control for cohor t size effects.

In order to investigate factors that have influenced the desirability of tran -

sition outcomes, a main-effects ordered logit model and an interactionordered logit model w ill be used. In the p receding section, I argued th at thedesirability of transition outcomes among new employment statuses is inthe following ord er from the least to the m ost desirable destination statuses:nonemployment ( j = 1), new emp loyment in external labor markets ( j = 2),self-employment ( j = 3), new employment in internal labor markets ( j = 4),and entrepreneurship ( j = 5). With π j = the probability that an employeemoves to state j, the ordered or cumulative probabilities that he or shemoves to state j or below is

P (Y ≤ j) = π 1 + … + π j, j = 1, 2, 3, 4, 5.

Then, the ordered logits of the four ord ered p robabilities are

logit[ P (Y ≤ j)] = log[( π 1 + … + π j) / (π j+1 +1 + … + π 5)], j = 1, 2, 3, 4.

On the basis of these formulations, I form a main-effects ordered logitmodel

logit[ P (Y ≤ j)] = α j – β T X, j = 1, 2, 3, 4


8/3/2019 5Kim_2



TABLE 4. DEFINITION S OF INDEPENDENT VARIABLES

Ind epend ent variable Definition

Individual level Education

(Refer en ce) O ne h as g ra d ua ted from elemen ta ry sch oo l or ha s n o forma l ed u ca tio n. M iddle school 1 if one has grad uated from mid dle school, 0 otherwise. High school 1 if one has grad uated from high school, 0 otherwise.College 1 if one has gradu ated from jun ior college or higher, 0 otherwise.

Gende r andgender-relatedfactors(Reference) Female and either (1) marr ied and before the fir st ch ildb ir th o r (2) the last

child is less than 7 years old, 0 otherw ise.Female without 1 if fema le and either (1) un ma rried a nd childless or (2) the last child is

young children more than 6 years old. Male 1 if male, 0 otherwise.

Structure level FILM 1 if one is in a firm intern al labor m arket, 0 other wise. 1 if (1) one’s

organization has externally hired nonm anagers wh o have a p ossibility of prom otion, or (2) one’s organization has internally hired people w ith asimilar rank to on e’s final ran k.

OILM 1 if one is in an occupa tional intern al labor m arket, 0 otherw ise. 1 if (1)one’s organization has externally hired lower- and mid-level man agers wh ohav e a possibility of promotion, or (2) one’s organ ization ha s externallyhired top -level managers.

ILM 1 if FILM = 1 or OILM = 1, 0 otherwise. Large organization 1 if one’s organ ization hires 500 emp loyees or more or on e works in a

public organization, 0 otherwise.Unionized organization

1 if there has been a labor u nion in on e’s organization w hile one isemp loyed, 0 otherw ise.

Time(Reference) One worked in 1987-1996.

Before 1961 1 if one w orked before 1961, 0 otherw ise.1961-1986 1 if one w orked in 1961-1986, 0 otherw ise.

DurationWork years Nu mber of years of working at the current w orkplace continuou sly.

Interaction terms First-order interactions between ILM and each of Middle School throughWork years .

Cohort(Reference) Born in 1961 or later.Cohort 1930s 1 if born in 1940 or earlier, 0 otherw ise.

Cohort 1940s 1 if born in 1941-1950, 0 oth erw ise.Cohort 1950s 1 if born in 1951-1960, 0 oth erw ise.

8/3/2019 5Kim_2


where α j is a cut point parameter for j, which is nondecreasing in j, β T is avector of coefficients to be estimated , and X is a vector of covariates, which

consist of individual-, structure-, and time-level independent variables. 6

An interaction ordered logit model assumes the same form, except thatinteraction terms between the variable for labor market structure and theother ind epend ent variables are also includ ed in X . An assumption for thisinteraction model is that including such interaction terms should improvethe fit of the main-effects ordered logit model. A variable for employmentduration will be included in X in both the main-effects and the interactionmodels in order to investigate the existence of any dependence of employ-ment transition on employment duration. Dummy variables for cohort will

also be included in X in both models in order to control for cohort sizeeffects.

Table 4 shows how the ind epend ent variables for both the binomial logitmod els and the ord ered logit mod els are defined. Table 5 shows the d efini-tions of the five d estination statu ses of emp loyment tran sitions, wh ich werementioned in the p receding section, for the ord ered logit mod els.

Table 6 presents the descriptive statistics for the most important charac-teristics of the sam ple. Some descriptive statistics in Table 6 are wor th men-tioning. First, the majority of respondents are relatively young. The mean

age is 37. 07, the m odal age category is 31-40, and the m odal cohor t categoryis the cohort born in th e 1960s or later. Second , 66.76 percent of respondents


6 It needs to be noted that β T does not have a j subscrip t, so it captu res an id entical effect of X on the log odd s of moving to j state or below (Agresti, 1996: 212). It also needs to be n oted tha tif an estima ted coefficient from β T is positive, Y is more likely to fall at the high en d of the scaleas a covariate associated with th at coefficient increa ses (Agresti, 1996: 214).

TABLE 5. DEFINITIONS OF D ESTINATION STATUSES OF EMPLOYMENT TRANSITION S

Destination status Definition

Entrepreneurship The status of not being paid by anyone else for one’s work and of hir ingfive or more em ployees.

Employment in ILMs Employment in firm or occupational internal labor markets ( ILM = 1 as

d efined in Table 4).Self-employment The status of not being paid by anyone else for one’s work and of hir ing

less than five employees.Employment in ELMs Employment in external labor markets (ILM = 0 as defined in Table 4).Nonemployment The status in which one is not in any one of the above statuses, i.e ., the

status in which the gap between an y two statuses above is more than oneyear.

8/3/2019 5Kim_2



TABLE 6. DESCRIPTIVE STATISTICS

Characteristic Percent

Individual level Age i n 1996

25-30 27.0531-40 43.8241-50 19.0051-60 10.13

Age i n 1996 (continuous) (Mean: 37. 07 / S.D.: 8.84)Completed edu cation

Elementary school or no ed ucation 1.69Mid dle school 14.38High school 52.38Junior college or higher 31.56

GenderMale 56.60Female 43.40

Childcare and ho usew ork respon sibili ty (person-year,female)Few ( Female without young children ) 76.98Greater (reference for Female without young children

an d Male ) 23.02 N th year at a workplace (person-year) 15.87

2 14.343 11.934 9.615 7.876 6.417-42 33.98

Work years (length of a work spell) (Mean: 6.30 / S.D.: 5.68)Cohort

Born in the 1930s 4.45Born in the 1940s 12.57Born in the 1950s 31.76Born in the 1960s or later 51.23

Structure level (work spell)Labor market s tructure

Firm internal labor market 30.81Occupational internal labor market 5.44External labor market 63.75

Numb er of employees500 or more or public organizations 18.92Less than 500 81.08

Existence of labor unionYes 25.91No 74.09

Time (person-year)Before 1961 0.591961-1986 44.31

1987-1996 55.11

Note: All statistics are weighted by the weighting variable.

8/3/2019 5Kim_2


have m idd le or high school edu cation, and 31.56 percent have more than ahigh school education. These figures are fairly high, considering the fact

that Korea has been a developing coun try. The h igh p roportion of Koreanswith second ary and postsecond ary education is a result of the fairly consis-tent and extensive investments in formal education by the Korean govern-men t, as a strategy of meeting the large and increasing demand for skilledlabor caused by Korea’s rap id economic developmen t.

Table 7 shows the proportion of employment transition types by genderfrom th e data, includ ing not only the spells for emp loyees but also the sp ellsfor nonemployees, i.e., entrepreneurs and the self-employed. 7 Several char-acteristics in Table 7 can be pointed ou t.

First, there are some noticeable characteristics that are related to the desir-ability of transition outcomes for workers in internal labor markets andworkers in external labor markets. (1) For both m en and wom en, both work-ers in internal labor markets and workers in external labor markets are morelikely to move to the same employment status than to other employmentstatuses once they leave their current w orkplaces. This means that w orkersin internal labor markets show better transition outcomes than workers inexternal labor markets. (2) Male workers in internal labor markets are lesslikely to move to self-employment and nonemployment than male workers

in external labor markets. This means that male workers in internal labormarkets show better transition outcomes than male workers in externallabor markets.

Second , entrepreneursh ip is th e m ost d ifficult status to enter after anonentrepreneur leaves his or her current status. Emp loyment in an internallabor market is also fairly difficult to enter after a working person who isnot employed in an internal labor market leaves his or her current status.These find ings are consistent w ith the argum ents presented in th e preced ingsection. Entrepreneurship is regarded as the m ost desirable new destination

status because it provides chances for the greatest economic success and thehighest autonomy in work. Employment in internal labor markets is moredesirable than self-employment and employment in external labor marketsbecause i t p rovides h igher earn ings and be t te r working condi t ions .Therefore, the d esirability of entrepreneu rship an d emp loyment in internallabor markets m akes entrance into th ese two n ew statuses rather d ifficult.

Third, for both men and wom en, individu als in nonemp loyment are morelikely to move to employment in external labor markets than to any other


7 Table 7 is stratified by gender because it has been shown that the Korean labor market issegregated by gender in terms of important aspects of labor market such as employment,wages, working conditions, and prom otion.

8/3/2019 5Kim_2


status, except nonem ploymen t. This is evidence that emp loyment in exter-nal labor markets is less preferred than any oth er status except nonemp loy-ment, for individuals in nonemployment can be regarded as being in theleast favorable position when searching for new workplaces. In contrast, forboth m en and wom en, people in nonemp loyment are less likely to move toentrepreneursh ip than to any other employment status. This is evidence that

entrepreneursh ip is more desirable than any other emp loyment status.Fourth, for all types of working people, especially for entrepreneurs and


TABLE 7. PROPORTION OF EMPLOYMENT TRANSITION TYPES BY GENDER (%)

End of

sp ell En trep ren eu r- Em ploym en t Self- Em ploym en t N on em ploy- TotalStart ship in ILMs employment in ELMs ment

of spell

MenEntrepreneur- 69.27

4.10 15.03 9.35 2.24100.00

ship (12.72) ( n = 127)Employment

2.3075.76

9.95 8.02 3.98100.00

in ILMs (21.56) ( n = 738)Self-

1.28 6.25 79.459.29

3.74100.00

employment (18.29) ( n = 889)

Employment 2.29 5.70 15.57 68.83 7.60 100.00in ELMs (30.23) ( n = 1,223)

Nonemploy-2.17 23.30 20.07

46.85 7.61100.00

ment (0.00) ( n = 556)

WomenEntrepreneur-

33.80 0.00 7.47 12.4246.30

100.00ship(17.26) ( n = 18)

Employment0.00

53.474.95 7.65 33.93

100.00in ILMs (24.32) ( n = 455)

Self-0.09 2.57

63.5212.34 21.48

100.00employment (21.61) ( n = 541)

Employment0.34 2.54 4.29

62.1330.70

100.00in ELMs (36.23) ( n = 1,245)

Nonemploy-0.59 12.82 11.80

36.11 38.67100.00

ment (0.00) ( n = 1,274)

Note: Unit is a spell. Values enclosed in parentheses in diagonal cells are from uncensored spellsonly, and values not enclosed in parentheses in diagonal cells are from all spells, includingcensored spells as well. Spells for entrepreneurship, self-employment, and nonemploymentare not used in the binomial and ordered logit models. All statistics are weighted by theweighting variable.

Source: Same as in Table 2.

8/3/2019 5Kim_2


workers in internal labor markets, women are more likely to move to non-emp loyment than are men. This is strong evidence that emp loyment stability

and the desirabil i ty of transit ion outcomes are significantly lower forwom en than for men.

Although Table 7 shows employment transition patterns in the Koreanlabor market to a certain degree, it is stratified only by gender and thereforedoes not reveal other important characteristics of employment transitionpatterns. In order to grasp important characteristics of employment transi-tion patterns in Korea that are influenced by factors other than gend er, mu l-tivariate analyses are needed , as demonstrated in th e subsequent section.

RESULTS

Employment Stability

Results of the analysis of factors affecting employment stability in Koreaare show n in Table 8. These includ e results from both the m ain-effects bino-mial logit m odel and the interaction binomial logit m odel.

The significant estimated coefficient for FILM shows that w orkers in firminternal labor markets are exp(-0.385) = 0.680 times as likely to leave theirworkplaces as workers in external labor markets. The significant estimatedcoefficient for OILM show s that workers in occup ational internal labor mar-kets are exp(-0.456) = 0.634 times as likely to leave their workplaces asworkers in external labor markets. These results support Hypothesis 1 andHypothesis 2 presented in the second section. Employers in internal labormarkets try to reduce employment transitions in order to make job laddersoperate more efficiently, so they provide workers in higher positions on jobladders with higher wages and better working conditions. Additionally,emp loyees in internal labor markets try to stay at their cur rent w orkplacesas long as possible, in order to take advantage of promotion opportunities

job ladders provide. Employment stability, therefore, is higher in internallabor markets than in external labor markets.

These results are consistent with results of the studies discussed in thesecond section, which show th e effects of labor market stru cture on emp loy-ment stability in the United States (Petersen and Spilerman, 1990) and inKorea (Yoo, 1996). The finding th at in terna l labor m arket structure increasesemp loyment stability in a d eveloping coun try such as Korea as well as in anadvanced industrial country like the United States implies the possibilitythat the inf luence of labor market s t ructure on employment s tabi l i tyemerges once a country’s industrialization reaches a moderate level. This


8/3/2019 5Kim_2



TABLE 8. RESULTS: BINOMIAL LOGIT MOD ELS FOR EMPLOYMENT STABILITY

Independent variable

Main-effects mod el Interaction mod el

Coefficient Robu st S.E. Coefficien t Robu st S.E.

Individual l evel Education (reference:

elementary school or no edu cation) Middle school -0.140 0.168 -0.151 0.191 High school -0.073 0.160 -0.010 0.184College -0.433* 0.171 -0.414* 0.202

Gende r and gend er-related factors (reference: femalewith youn g children)Female without young children -1.292*** 0.102 -1.296*** 0.126

Male -1.488*** 0.098 -1.511*** 0.123Structure level

FILM -0.385*** 0.065 -0.068 0.410OILM -0.456*** 0.128 -0.162 0.430

Large organization -0.139 † 0.076 0.001 0.100Unionized organization -0.270*** 0.067 -0.379*** 0.086

Time (reference: 1987-1996) Before 1961 0.563 † 0.312 0.839* 0.3411961-1986 0.169** 0.063 0.172* 0.072

DurationWork years -0.003 0.006 -0.002 0.007

Interaction terms Middle school × ILM -0.105 0.379 High school × ILM -0.412 0.361College × ILM -0.288 0.377Female without young children × ILM -0.013 0.215

Male × ILM 0.052 0.204 Large organization × ILM -0.336* 0.156Unionized organization × ILM 0.271 † 0.139

Before 1961 × ILM -0.642 0.571

1961-1986 × ILM -0.019 0.121Work years × ILM -0.001 0.012

Cohort (reference: born in 1961 or later)Cohort 1930s -0.796*** 0.137 -0.799*** 0.138Cohort 1940s -0.840*** 0.097 -0.820*** 0.098Cohort 1950s -0.580*** 0.074 -0.575*** 0.074

Constant -0.145 0.188 -0.179 0.220

Log-likelihood -6,251.358 -6,244.261Degrees of freedom 20,301 20,291Number of observations 20,317 20,317

† p < .1, * p < .05, ** p < .01, *** p < .001 (two-tailed tests)

8/3/2019 5Kim_2


possibility coincides with the assumption underlying the definition of aninternal labor market used in this study. In other words, an important pre-

cond ition for the characteristics of an intern al labor market, i.e., a job ladderwith entry port only at the bottom or with movement up this ladder, is thata coun try shou ld already have achieved at least a mod erate degree of ind us-trial developm ent.

Table 8 shows that the estimated effect of an interaction between organi-zational size and labor market structure is negative and significant. Thisresult means th at in Korea over time, the internal labor market structure h asincreased the d egree to which emp loyment stability is higher in large orga-nizations than in small organizations. In the first place, there are three rea-

sons why employment stability is higher in large organizations than insmall organizations: (1) The cost for recruiting and training workers is high-er in large organizations because they use more complicated technologies.(2) Large organizations are able to provide w orkers with higher w ages andbetter working conditions because they have greater resources based ongreater market power. (3) Working conditions are better in large organiza-tions because more complicated technologies used in large organizationslead to the adoption of personnel management based on administrativerules and procedures rather than on arbitrary d ecisions of supervisors. Most

positions on job lad ders require d ifferent levels and kind s of skills andknowledge of workers, and job ladders’ greater efficiency helps make moreprofits. Job ladders in internal labor markets, therefore, make more compli-cated technologies used in large organizations even more complicated andthe greater m arket p ower of large organizations even greater.

It is also shown in Table 8 that the estimated effect of an interactionbetween unionism and labor market structure is positive and marginallysignificant. This means that in Korea over time, the internal labor marketstructure has d ecreased the d egree to w hich employmen t stability is higher

in unionized organizations than in nonunionized organizations. This find-ing may be explained by a special characteristic of Korean industrialization,tha t is, the stronger efforts of labor unions in external labor markets to over-come strict labor controls by the Korean state. Korean workers generallyfaced strict labor controls by the state during industrialization. In order toprotect and promote economic and political interests, workers in externallabor markets, who have hardly had any means to do so, have had to relyon labor unions more than workers in internal labor markets, who have hadmore m eans to d o so by virtu e of their m ore favorable positions in th e labor

market. Labor unions in external labor markets, therefore, have been moreactive in increasing their bargaining power and improving communication


8/3/2019 5Kim_2


8/3/2019 5Kim_2



TABLE 9. RESULTS: ORDERED LOGIT MODELS FOR DESIRABILITY OF TRAN SITIONOUTCOMES

Independent variable Main-effects model Interaction mod elCoefficient Robu st S.E. Coefficient Robu st S.E.

Individual l evel Education (reference:

elementary school or no edu cation) M iddle school 0.420 0.311 0.449 0.353 High school 0.522 † 0.307 0.579 † 0.353College 1.036** 0.319 1.030** 0.367

Gende r and gend er-related factors (reference: femalewith young children)Female without young children 1.537*** 0.187 1.515*** 0.206

Male 3.242*** 0.188 2.903*** 0.203Structure level

FILM 0.821*** 0.121 1.023 0.867OILM 0.185 0.264 0.351 0.916

Large organization 0.051 0.138 0.103 0.165Unionized organization 0.049 0.127 0.051 0.148

Time (reference: 1987-1996) Before 1961 0.079 0.665 0.292 0.7771961-1986 0.033 0.116 0.080 0.122

Duration

Work years -0.030* 0.012 0.007 0.014 Interaction terms M iddle school × ILM -0.315 0.827 High school × ILM -0.252 0.799College × ILM -0.155 0.812Female without young children × ILM -0.200 0.418

Male × ILM 1.151** 0.368 Large organization × ILM -0.217 0.293Unionized organization × ILM -0.198 0.280

Before 1961 × ILM -0.561 1.2951961-1986 × ILM -0.057 0.230Work years × ILM -0.093*** 0.021

Cohort (reference: born in 1961 or later)Cohort 1930s -0.292 0.269 -0.284 0.274Cohort 1940s -0.019 0.181 -0.032 0.182Cohort 1950s 0.127 0.129 0.139 0.126

Cut pointsCut point 1 2.377 0.350 2.406 0.397Cut point 2 4.002 0.361 4.061 0.404Cut point 3 5.079 0.369 5.196 0.411Cut point 4 7.288 0.391 7.487 0.433

Log-likelihood -2,644.117 -2,612.268Degrees of freed om 2,263 2,253Number of observations 2,282 2,282

† p < .1, * p < .05, ** p < .01, *** p < .001 (two -tailed tests)

8/3/2019 5Kim_2


closely related to a country’s achievement of a mod erate degree of ind ustrialdevelopment.

It is shown in Table 9 that the estimated effect of an interaction betweengender and labor market structure is positive and significant. The mecha-nism for this result is as follows. Employers believe that male workers con-tribute more to the efficient operation of job ladders than female workerswho have greater childcare and housework responsibilities. As a result, jobladd ers in internal labor markets p rovide more promotion opp ortun ities formales than for females. Therefore, they p rovide more m aterial, intangible, orsocial assets that are helpful to having better transition outcomes for menthan for w omen. Consequently, the tend ency that institutional and custom-

ary p ractices based on patr iarchal values allow m ale workers to h ave bettertransition outcomes is stronger in internal labor markets than in externallabor markets in Korea.

The fact that the labor market structure has barely changed the effects of other factors on the desirability of transition outcomes implies the follow-ing. The degree of job ladder matu rity, i.e., the complexity and length of jobladders in the Korean internal labor market, has not been so high as toin tens i fy the advantages for workers who have a l ready had grea te rresources and been in various more favorable positions in the Korean labor

market, in terms of the d esirability of tran sition outcomes. A special charac-teristic of Korea’s industrialization, among others, may be responsible forthe relatively low d egree of job ladd er maturity in the Korean internal labormarket. This characteristic is that the period of industrialization may havebeen too short for job ladd ers in the Korean internal labor m arket to becomecomplex and long enough .

CONCLUSION

Overall, results of the analysis show th at the internal labor market stru c-ture has significantly increased employment stability and the desirability of transition outcomes in Korea over time. However, an internal labor marketstructure was shown to have had no significant influences on the ways inwhich factors other than organizational size and unionism affect employ-ment stability, and on th e ways in w hich factors other than gender affect thedesirability of transition outcomes. I suggest that this is due to the rapidindustrialization of Korea, so that there has not been enough time for aninternal labor market structure to m ature fully.

What do these results mean for Korean workers’ economic and socialwell-being over time? One needs to keep in mind that the overall level of


8/3/2019 5Kim_2


Korean workers’ economic well-being has increased due to Korea’s rapidindustrialization. However, it also needs to be p ointed ou t that several fac-

tors have increased differences in economic and social well-being amongdifferent types of workers in Korea. The internal labor market structure,more human capital, being male, hav ing less respon sibility for childcare andhousework, larger organizational size, and unionism have more or lesswidened gaps in the level of economic and social well-being among Koreanworkers. Workers in external labor markets, workers w ith less hum an capi-tal, female workers, workers w ith greater childcare and hou sework respon-sibilities, workers in small organizations, and w orkers in n onu nionizedorganizations have also enjoyed the increase in economic and social well-

being since the beginning of Korea’s industrialization. However, socio-eco-nomic well-being has been significantly lower for them than for theirrespective counterparts, i.e., workers in internal labor markets, workerswith more human capital, male workers, workers with less childcare andhou sework responsibilities, workers in large organizations, and workers inun ionized organ izations.

In sum, Korea’s industrialization has had mixed effects on workers’ eco-nom ic and social well-being. On the one h and , it has improved the overalllevel of workers’ well-being; on the oth er han d, it has increased heterogene-

ity in well-being among d ifferent typ es of workers. From th e Korean experi-ence, other industrializing countries can observe the mixed effects of indus-trialization on w orkers’ econom ic and social well-being. Whether a d evelop-ing coun try chooses to give priority to the overall increase in w orkers’ well-being, or to improvem ent in th e equity of well-being among d ifferent typ esof workers d epend s on how collective decision-making p rocesses about thisissue are restricted by the country’s particular social, political, and historicalcontext and international relations.

This stud y d ealt with Korea’s ind ustrial ization throu gh 1996. Korea

encoun tered a m ajor foreign exchange crisis in N ovember 1997, which w as agreat blow to economic growth and workers’ welfare. For example, the realGDP growth rate plunged from 5.0 percent in 1997 to -6.7 percent in 1998,and the u nem ploym ent rate soared from 2.6 percent in 1997 to 6.8 percent in1998. 8 As a w ay of coping w ith the crisis, the state and capital opted for thestrategy of labor market flexibilization by easing both the firing of employ-ees and hir ing variou s forms of part-time emp loyees (Bai, 1999: 584-585). Asa result, the ratio of part-time employees to full-time employees increased


8 The real GDP growth rates and the unemployment rates in this section are presented bythe N ational Statistical Office.

8/3/2019 5Kim_2


8/3/2019 5Kim_2


lenges from globalization as well as from the Korean state and capital. Thecollective bargaining structure in Western countries has been decentralized

since the early 1980s (Katz, 1993). The decentralized bargaining structure inWestern countries has been significantly influencing labor movements andlabor markets in Third Word coun tries through th e globalized economy andlabor markets (Park, 2002: 63). Whether or not Korean workers’ economicand social well-being w ill w orsen in the n ear futu re w ill significantlydepend on how effectively labor movements in Korea will respond to thestrategy of labor market flexibilization by the state and capital and to thechallenges from globalization, along with how effectively the state and capi-tal will pu rsue th is strategy and how the Korean economy w ill be affected

by trend s in the international political econom y.In this study, I attempted to fill the gaps of research on employment sta-

bility and the desirability of transition outcomes in Korea. Main limitationsof this study are du e to an insufficient theoretical framew ork, caused m ainlyby limitations of the data. These limitations need to be overcome in futureresearch. Especially, future research needs to define the desirability of tran-sition outcomes more systematically, using more elaborate data and evi-dence.

REFERENCES

Agresti, Alan. 1996. An Introduction to Categorical Data Analysis. New York: JohnWiley & Sons, Inc.

Althauser, Robert P. and Arne L. Kalleberg. 1981. “Firms, Occupations, and theStructure of Labor Markets: A Conceptual Analysis.” Ivar Berg, ed., SociologicalPerspectives on Labor Markets , pp . 119-49. New York: Acad emic Press.

Bai Moo Ki. 1989. “Changes in Environments and Conditions of Labor Relationsand Their Imp lications [Nosagwan -gye H wan -gyeong, Jogeonui Byeonhw awaGeu Hamui].” Cho Woo Hyun and Bai Moo Ki, eds., Labor Economy in Korea:

Issues and Prospects [ Han-gugui Nodonggyeongje: Jaengjeomgwa Jeonmang ], pp. 577-602. Seoul, Korea: Gyeongmunsa.

Barreto, Humberto. 1989. The En trepreneur in Microeconomic Theory: Disappearance and Explanation . New York: Rou tledge.

Blaug, Mark. 2000. “Entrepreneurship Before and After Schumpeter.” RichardSwed berg, ed., Ent repreneurship: The Social Science V iew , pp. 76-88. New York:Oxford Un iversity Press.

Brou wer, Mar ia . 2000 . “Entrepren eursh ip an d Uncer ta in ty : Innovat ion an dComp etition am ong the Many.” Small Business Economics 15: 149-60.

Casson, Mark. 1982. The Entrepreneur: An Economic Theory . Totowa, NJ: Barnes &Nobel Books.

Doeringer, Peter B. and Michael J. Piore. 1985. Internal Labor Markets and Manpower Analysis . Arm onk, NY: M.E. Sha rp e, Inc.


8/3/2019 5Kim_2


8/3/2019 5Kim_2


KIM SUNGHOO N received his Ph.D. in sociology from Brown University. He is current-

ly a Senior Researcher at the Institute of Social Development and Policy Research at Seoul National University. His areas of interest are labor markets, social networks, development,and methodology. His e-mail address is [email protected].


8/3/2019 5Kim_2


APPENDIX A: RELEVANT QUESTIONS FROM EAST ASIA SOCIAL

SURVEY

c111: In the current job, what is your average annual income (includingbonu s, allowances, and taxes)? 0,000 won (Interviewer: If the respondent hesitates to answer, refer to [card 3] ( c11av1 ).)

[card 3] 0. Refused to answ er1. Below 3,000,000 won2. 3,000,000 - less than 9,000,000 won

3. 9,000,000 - less than 15,000,000 won4. 15,000,000 - less than 21,000,000 won5. 21,000,000 - less than 30,000,000 won6. 30,000,000 - less than 40,000,000 won7. 40,000,000 - less than 50,000,000 won8. More than 50,000,000 won

If our society were divided into ten classes, in which class do you think your income and social status would belong? (1 means the lowest class; 10

mean s the highest class.)e151: Income classe152: Social posit ion class

APPENDIX B: WEIGHTING VARIABLE FOR THE ORIGINAL DATA

(adapted from the document of the Korean part of East Asia SocialSurvey)

To facilitate comp arison to the general pop ulation u sing the total sampleof 3,570 persons, a weighting variable is provided. Applied to the total of both samples, this weighting variable approximates the distribution foundin Census statistics. Specifically, we cross-tabulated the Census populationby the following characteristics. In the data, the gender, age, occupation,and work form values are coded in the variable labeled ‘gajf ’ (gender, age,

job, form) as follows.


8/3/2019 5Kim_2


Each cell produced by cross-tabulating gender, age, occupation, and formof work w as used in the following calculation of ratio weights:

Ratio Weight = (Proportion in Census) / (Proportion in Survey)

This ratio weight variable ranges in value from a low of 0.117 to a high of 5.0, with a m ean of 0.9897.


1 2 3 4 0

Gend er Male FemaleAge 20-29 30-39 40-60Occupation Clerical Sales & service All others No work Form of work Owner/ manager Self-employed Employee Family worker No work

Date post:	06-Apr-2018
Category:	Documents
Upload:	ramesh-pantham
View:	219 times
Download:	0 times

5Kim_2

Documents