Analyzing gender wage gap with 『Basic Statistical of Wage Structure』researched by Korean Ministry of Labor from 1986 to 2004, the level of effect on wage scales and structure of gender wage gap was changed as time goes by. According to time series...
Analyzing gender wage gap with 『Basic Statistical of Wage Structure』researched by Korean Ministry of Labor from 1986 to 2004, the level of effect on wage scales and structure of gender wage gap was changed as time goes by. According to time series analysis of gender wage comparison, the wage gap between male and female is significant and smaller than past.
As the first step, I decompose gender wage gap into two parts, explainable part and unexplainable part with Oaxaca Decomposition. The factors of explainable gender wage gap are supposed education, experience, working year, skill, position in a firm, joining of a labor union, marriage, occupation, firm size, industry, and region. Those factors are observable as well as considered to determine wage level. The part of unexplainable gender wage gap is supposed the reminder of gender wage gap except explainable part. It is assumed that the unexplainable gender wage gap is caused by gender discrimination, so this part of gender wage gap is considered irrational and unreasonable.
As the next step, I decompose the change of gender wage gap into four parts by wage- determining factor effect, observed price effect, ranking effect, and dispersion effect with Juhn-Murphy
-Pierce Decomposition. In the same manner of Oaxaca Decomposition, Juhn-Murphy-Pierce Decomposition can also decompose into explainable part and unexplainable part: the gender wage gap from both wage-determining factor effect and observed price effect is explainable part and the other, which is caused from ranking effect and dispersion effect, is unexplainable part. Because I think Korean labor market experienced big change while each industry overcame Korean Monetary Risk from 1997 to 1999, I apply Juhn-Murphy-Pierce Decomposition for the structural change of gender wage gap by a time difference.
At the result of Oaxaca Decomposition, both explainable and unexplainable gender wage gap in whole industry are decreased from 1986 to 2004 and the ratio of explainable and unexplainable part is 7 to 3 in 2004. That is the Oaxaca Decomposition result for each industry. In the manufacturing industry and service industry, which are woman-high-allocated industries, unexplainable gender wage gap takes 20 to 30 percent of total gender wage gap. On the other hand, the mining industry, the electronic, water and gas service industry and the construction industry, which are woman-low- allocated industries, has higher portion of unexplainable gender wage gap than the manufacturing industry and service industry.
At the Juhn-Murphy-Pierce Decomposition result with comparison of whole industry from 1996 to 2000, wage-determining factor effect and ranking effect on gender wage gap are decreased, but observed price effect and dispersion effect are increased. In overall analysis during this period, gender wage gap is decreased. After Korean Monetary Risk, all effects, except ranking effect, increased gender wage gap, and overall gender wage gap is increased in whole industry between 2000 and 2004. That is the result of Juhn-Murphy-Pierce Decomposition for financing industry. All effects decrease gender wage gap between 1990 and 1996. However, after Korean Monetary Risk, all effects, except ranking effect, increase gender wage gap between 1998 and 2004. It means that the hypothesis which Korean Monetary Risk brings the decreasing of ranking effect in the labor market of financing industry and this change is from the solution for competitive environment can be accepted.