The Korean Economic Forum
Labor Productivity and Wage in Korean Economy
Jungsoo Park (Sogang University)Year 2019Vol. 12No. 1
AbstractThis study provides a comprehensive analysis on the comparison of laborproductivity growth and wage growth in Korea for the 2000-2017 period. Thefindings show that contrary to the concern raised in the recent literature thatwages are lagging behind growths in GDP per employment, actually wagegrowth and GDP per employment growth for the Korean economy were verysimilar for the corresponding period either in nominal terms or real terms usingthe same price index. Furthermore, the firm-level and establishment-level microdata show that wage growth is surpassing the productivity growth, especially inthe manufacturing sector and for the small-and-medium-sized enterprises.These findings imply that recent government policies to promote rapid wageincreases based on incorrect facts should be reconsidered.