The Korean Economic Forum
Self-Employment Sector and Functional Income Distribution of Korean Economy
Jungsoo Park (Sogang University)Year 2020Vol. 12No. 4
This study presents details of self-employment sector and analyzes howchanges in the self-employment sector affects issues related to functional incomedistribution. The results show that first, self-employment sector is substantiallylarge and comprises 40.8% of the total employment. Second, contrary to thefindings in Lee(2019), labor productivity and wages calculated based on nationalincome data show that growth rates of wages surpass those of the laborproductivity for the 1975-2017 period and that both growth rates do not showsignificant difference for the 2000-2017 period when the omitted operatingsurpluses of the ‘self-employed sector with employees’ are correctly accountedfor in the calculation. Third, the adjusted labor income shares based on the newapproach of this study are higher than the averages of 20 OECD economies.Furthermore, they do not show any trend for the long period of 1980-2017contrary to the adjusted labor income shares produced in the existing literature.Lastly, declining share of household income is due the declining share ofself-employment, not due to the fall in the labor income share.