Open AccessAnalysis of Pay Inequality and its Impacts on Growth and Performance in the Korean Manufacturing Industry Post Asian Financial Crisis
Author(s) -
Almas Heshmati,
Yun-Hee Kim
Publication year - 2017
Publication title -
ukh journal of social sciences
Language(s) - English
Resource type - Journals
ISSN - 2520-7806
DOI - 10.25079/ukhjss.v1n1y2017.pp9-21
Subject(s) - kuznets curve , inequality , economics , economic inequality , theil index , panel data , index (typography) , capital (architecture) , macroeconomics , demographic economics , econometrics , geography , mathematical analysis , mathematics , archaeology , world wide web , computer science
This paper examines the relationship between pay inequality, economic growth, and performance in Korea. Pay inequality is estimated by using Theil’s index to identify the factors determining the level of pay inequality, and establish its relationship with economic growth and performance. For the empirical results we use panel data on the Korean manufacturing sector for the period 1993 to 2003. It appears that a large portion of rising pay inequality can be attributed to rising relative pay among the small-sized firms, outside the capital city area and in the ICT sectors which were affected by the economic structural reform since 1997. The findings support the hypothesis of an “augmented” Kuznets Curve, according to which certain developed countries are found on an upward-sloping addendum to the original formulation of Kuznets.