The Korean Economic Forum
Labor Productivity, Wage and the Labor Income Share in the Korean Economy
Kang-Kook Lee (Ritsumeikan University)Year 2019Vol. 12No. 2
This study presents an empirical analysis to criticize Park(2019) about therelationship between the growth of labor productivity growth and wage in Koreaafter 2000. He argues that former studies that reported the largeproductivity-wage gap in Korea were wrong in terms of interpretation of statisticsbecause of the difference between price indices. However, this study argues thathis conclusion is not correct because it uses problematic wage data that do notcover all workers in the whole national economy. This study finds that there wasa large gap between nominal gross labor productivity and nominal wage for the2000-2017 period, using data from national accounts. It also reports there wasa gap between net productivity and wage though it was relatively smaller. Thissuggests that the growth of wage was lower than that of labor productivity after1997, which led to the fall of the adjusted labor income share. In addition, afterexamining debates about the measurement of the labor income share in Korea,this study argues that we should rigorously analyze the labor income share.