The Polarization of the South Korean Female Labor Market

Transcription

1 The Polarization of the South Korean Female Labor Market Youngok Kim, Senior Fellow, KWDI Hyunjoo Min, Fellow, KWDI I. Why Does the Polarization of the Korean Female Labor Market Matter? The polarization of the labor market has attracted attention of the researchers and the policy makers in Korea since the Korean financial crisis. Some researchers have pointed out the polarization of occupation structure in the Korean labor market as a major cause of the increase in working poor (Wright and Dwyer, 2003 Chun, 2004). With the change of industrial structure, the number of jobs in service industry has rapidly increased but most of those jobs were "precarious jobs" jobs with precarious working conditions. In the US, the growth of service industry sector has led more men to have precarious jobs and it resulted in a polarization of male workers in the labor market (Wright and Dwyer, 2003). In Korea, there are also some indications that Korean economy has experienced a polarization as evidenced in other industrialized countries. While other previous researches have emphasized that male workers are primarily disadvantaged as the polarization of the labor market intensifies, the employment of Korean women has been sharply divided into "bad" and "good" jobs. Married women have been a major part of the Korean women's labor market and they have traditionally been employed in low-paying, unstable jobs in informal sectors. But itis noticeable that a growing number of women are pursuing professional jobs. With this evidence, some scholars argue that Korean women have advanced in the labor market during the past decade while Korean men have suffered from the industrial restructuring. Despite of this controversy, it is undeniable that, today's employment structure in the female labor market may be defined as a polarization of the female labor market of Korea. This study attempts to examine the tendency and the process of the polarization of

2 the Korean female labor market. There are various ways to measure the polarization of the labor market. Some studies categorize workers based on family income, but others point out that this method may overlook the importance of individual workers' wage in the labor market stratification. This study pays special attention to the stratification of wage workers and occupation structure and defines "polarization" as the increase in the number of low-wage and high-wage jobs along with the decrease in the number of middle-wage jobs. While previousresearches have presented some descriptive features of the labor market polarization (e.g., increase or decrease rates of jobs by industries and wage levels), they lack analytical explanation which describes why and how polarization occurs in the labor market. This study analyzes the process of the polarization in the female labor market as well as describes the characteristics of job structures. II. Data and Methodology This study draws data from four major national data sets: Economically Active Population Survey (EAPS) from 1998 to 2004, Basic Survey on Wage Structure(BSWS) from 1998 to 2004 and Korea Labor and Income Panel Study (KLIPS) from 1998 to To categorize jobs into quintiles, we merge EASP and BSWS and produced median earnings for each matrix of occupation andindustry. This information describes the patterns of job expansion and reduction for the past decade and further differentiates the patterns of job growth for men and women by employment status and demographics. To classify low-wage and high-wage earners, we define low-wage earners as workers who earn less than 2/3 of median hourly wage and high-wage earners as workers who earn 150% of median hourly wage in each matrix of industry and occupation. Finally, we combine this information with the KLIPS to analyze the process of entry into low-wage and high-wage ranks. From the KLIPS, we could obtain the detailed information on work conditions as well as family status, including exact start and exit dates of jobs up to five, hourly wages, weekly work hours, occupation, industry and union status. Furthermore, we classify occupational gender segregation as categorical variables, such as female-dominated jobs, mixed gender jobs and male-dominated jobsusing the gender ratio from a merged data set. From these data, we also construct person-period files with time-varying measures of variables and use event history analysis to investigate the process in which women land on low-wage or

3 The Polarization of the South Korean Female Labor Market 3 high-wage jobs. III. The Korean Female Labor Market - Reversed J-shaped Polarization The Korean Female labor market demonstrates slightly polarized job structure which has an increase in the number of low and high paying jobs with a large decrease in the number of middle paying jobs. It is noticeable that the increase rates of low-paying jobs exceed those of high-paying jobs contrary to the traditional U-shaped polarization. The wage of the most jobs for women aged over 50 is low and the increase in the number of those jobs go beyond those of other jobs. Number of jobs for low-educated women hasincreased more than those for highly educated women but at the same time, highly educated women also have low-paying jobs. High-paying jobs have high rates of standard employment while most jobs at the bottom of the labor market strata are characterized as nonstandard employment. These findings highlight that the stratification in the labor market develops into a growth of low wage workers with the evidence of a large increase of low-paying jobs for women while the results prove the increase in the number of high paying jobs. In understanding the mute-shaped polarization of the female labor market, some researchers have argued that Korean women have advanced in the labor market in terms of better chance of landing on "good jobs." While the lack of an opportunity for "good jobs" has continued for male workers, the proportion of women in professional and managerial jobs has steadily increased. The researchers claim that the current trend of polarization in female labor market may be an intermediary stage for women's advancement in the labor market. While this argument emphasizes the growing number of women with high paying jobs, little attention is paid to the increasing number of women with low paying jobs. It is important to understand that Korean women's labor market faces a risk for producing a large population of female working poor. If the precarious job is a steppingstone for the women with minimal skillsand poor training in moving upward to have better jobs, temporal employment in the precarious job may have a bright side for the career of women. But the matter is whether women in these jobs will be exposed to an opportunity to upward mobility.

4 IV. Who Gets Precarious Jobs? vs. Who Gets Good Jobs? As discussed above, Korean women in the labor market have not been heavily engaged in economic activities compared to those in industrialized western countries. Although Korean women have achieved high level of educational attainments as other OECD countries, their economic activities can be summarized as 50 percent of participation rates in the labor market, M-shaped participation pattern, and highly segregated occupational structure. It is true that the recent economic polarization worsened male workers' employment conditions. In particular, less-educated male workers suffer from poor wages and unstable employment. But this analysis does not mean that female workersenjoy better opportunities in the labor market than male workers. The fact that Korean women have consistently been employed in "very low paying, less prestigious jobs" than Korean men highlights the effect of the recent polarization on male workers. In order to assert that the polarization exposes male workers to poor working conditions while female workers enjoy better working conditions, empirical analyses should present evidences that more women land on middle or high paying jobs and women with low paying jobs move upward into better jobs. However, the results indicate that work experience in precarious jobs continue to place the female workers in precarious jobs throughout the employment life cycle: Women who have had low-paying jobs are highly likely to be employed again for low-paying jobs. To make the matter worse, the vicious circleof employment in precarious jobs among women does not simply come from the employment in female-oriented, low-paying jobs. Previous research has claimed that women experience higher rates of poverty than men since women tend to have "female jobs" most of which pay poorly. But our results show that women with male-dominated jobs are more likely to be employed in low-paying jobs than those in female-oriented jobs. It is assumed that female poverty mainly results from the disproportionate placement of women into female-oriented jobs, since male-dominated jobs tend to pay better than female-dominated jobs and a large proportion of women are employed in female-oriented jobs. But the findings emphasize that women face double barriers in the labor market: First, there is an entry barrier which women face at their initial employment stage for a job second, women are disadvantaged even in "good jobs" in terms of wage discrimination even if they succeed in getting those jobs. Further, less-educated women in male-oriented jobs are highly likely to be

5 The Polarization of the South Korean Female Labor Market 5 employed for "very low paying jobs" than other women. These results indicate that the Korean female labor market is stratified by educational attainments as well as by gender. This dual stratification process of the labor market may obstruct policy change that will improve the polarization of the female labor market. For women, it is important to find that employment continuity around marriage and childbirth enhances the probability of getting hired for high paying jobs. Women who have continued to work in a labor market through childbirths are more likely to have "good jobs" than other women. The neoclassical economic theory argues that employment continuity helps workers to accumulate skills and training and to increase the chance of getting hired for high paying jobs. On the other hand, ones with intermittent labor force participation are less likely to be employed for good jobs than others. Our results support this theoretical argument and show that the career continuity around childbirths and child rearing increases the probability of women's employment for high paying jobs. But the effects of employment continuity on women's job placement differ by educational attainments among women. For less-educated women, employment continuity rather increases the probability ofemployment for low-paying jobs while highly educated women with employment continuity are far more likely to be employed for "good jobs" than other women. This finding may suggest that the neoclassical economic theory offers mixed support to explain the female labor market outcomes. That is, a positive relationship between employment continuity and employment for good jobs may only be applied to women in Korea with high level of education. Our results suggest that the current trend of the polarization consists of mixed factors of the labor market, individual and institutional factors. At the individual level, labor market attachment is the most important variable in explaining recent trend in stratification in the labor market. Further, educational attainment also plays a significant role in shaping a polarized employment structure in the female labor market. To improve the conditions of female labor market, it is necessary to adopt and monitor various policies for working women at the institutional level. V. Implications for the Policy What can help working women make better off? Institutional intervention is necessary to improve women's status in the labor market. First of all, we need more,

6 better jobs for women. For the past decade, the decrease in the number of median-level paying jobs was more prominent for men than women. But the population of working poor is comprised of higher percentage of women than men. Since a large number of women workers have already been employed in low-paying jobs, this trend of polarization may worsen the segregation among women workers into less-educated and highly-educated, into low-paying jobs and high-paying jobs, and into stable and unstable employment. Primary policy to improve the labor market polarization should be creating more, better jobs for women. In improving the working conditions for women, it may be a good strategy to institutionalize a license or certificate to get qualified for certain jobs, producing more semi-professional occupations. For example, babysitters or personal helpers for sick people are currently categorized as less prestigious and poorly paid jobs. But institutionalized qualification for the job applicants and social protection will improve the quality of those jobs and allow workers enjoy better employment conditions. The government should develop the current employment actions to create more jobs in social servicesector. A large proportion of jobs in social service sector tend to be dominated by women. Since social service is provided by the government, job security tendsto be better than those in the other sectors. To achieve social welfare system and the employment growth among women all together, increase of jobs in social servicesector would be a very promising policy. Secondly, it is necessary to consider a policy for enhancing women's employment continuity. It will offer working women more opportunity for better jobs. Although various political arrangements and actions for women's work continuity have already been taken, there is no evidence that those actions offer practical supports for working women with family responsibilities. Given that a very small percentage of working mothers with kids take advantages of maternity leave, otherwise most of them quit their jobs for childcare, it is very important to adopt well-devised arrangements and regularly monitor the system to support working mothers practically. Without establishing family-friendly social conditions, career continuity for working mothers may be hardly achieved. Finally, we would propose a policy that supports upward mobility for women. As discussed above, less-educated, low-skilled women workers are always in danger of falling into poverty. Or they can hardly take chances to leave low-paying jobs due to lack of skill assets. Well-focused training programs are necessary to help them out of "precarious jobs" and to move into better ones. In order for an individual worker to accumulate better skills and make advancement in a job, training programs should be offered at the workplace. For those who experienced any break from the labor force

7 The Polarization of the South Korean Female Labor Market 7 to get back to work, well-focused training programs should be provided in the communities or nonprofit organizations including governmental agencies. Since the needs of women who would return to work may differ by their demographics and work histories, only individualized training programs can help prospective workers to successfully return to the labor market and find "good jobs."