Gender wage penalty in parenthood: A comparative study of South Korea and Japan

• Published date: 01 February 2023
• Author: Hanna Jung
• Date: 01 February 2023
• DOI: http://doi.org/10.1111/1468-0106.12397

ORIGINAL ARTICLE

Gender wage penalty in parenthood: A

comparative study of South Korea and Japan

Hanna Jung

School of Economics, Mokpo National

University, Muan-gun, South Korea

Correspondence

Hanna Jung, School of Economics,

Mokpo National University, A8-3317,

1666 Yeongsan-ro, Cheonggye-myeon,

Muan-gun, South Korea.

Email: hnjung5493@mnu.ac.kr

Funding information

This Research was supported by Research

Funds of Mokpo National University in

2021

Abstract

Both South Korea and Japan attach significant impor-

tance to women0s marriage and their role in the family.

Based on this fact, the present study analyzed gender

wage penalty in parenthood in both the countries and

compared the size and characteristics. We used condi-

tional quantile regression models with counterfactual

decomposition, and panel data from South Korea and

Japan for 2007–2014. Results suggest that the gender

wage penalty in parenthood of Japan was greater than

in South Korea, indicating that discrimination against

mother-workers in Japan is more serious than in

South Korea. Analysis by wage distribution showed

that the gender wage penalty in parenthood was high

in the low-wage group in South Korea, whereas it was

high for the high-wage group in Japan. This finding

indicates that South Korea needs to give fair treatment

to the low-wage group and mother-workers of small

and medium enterprises, while Japan needs to alleviate

discrimination against high-wage mother-workers.

1|INTRODUCTION

The characteristics of South Korean and Japanese female workers in the labour market are sim-

ilar. The perception that men are breadwinners and women are housewives has been pointed

out as the cause of the M-shaped employment curve, whereby the employment rates of female

workers in their 30s and 40s decreases, and the labour market structure is more advantageous

to men than to women. Although such characteristics exist in many countries, they specifically

have significant influence in the societies of South Korea and Japan. According to OECD data,

the gender wage gap in 2018 in South Korea and Japan was 31.5% (1st place) and 22.5% (3rd

Received: 12 May 2019 Revised: 25 April 2022 Accepted: 6 June 2022

DOI: 10.1111/1468-0106.12397

Pac Econ Rev. 2023;28:3–26. wileyonlinelibrary.com/journal/paer © 2022 John Wiley & Sons Australia, Ltd. 3

place), respectively (Figure A1). Gender wage gap is the most widely studied topic among stud-

ies on gender discrimination in the labour market. Specifically, parenthood has been recently

pointed out as an important factor that impedes gender equality (Grimshaw & Rubery, 2015).

However, studies on this topic in the South Korean and Japanese contexts are scant.

The phenomenon that mothers earn less than childless women with similar characteristics

is called the ‘motherhood wage penalty’and where fathers earn more than childless men with

similar characteristics it is called the ‘fatherhood wage premium’(Cukrowska-Torzewska &

Lovasz, 2020).

Economic growth has led to an increase in the education level and labour force participation

rate of women. However, in the case of female workers, the period of active participation in the

labour market coincides with that of marriage, child birth and child-rearing. Accordingly, there

are many cases of women leaving the labour market without being able to overcome the period

1

even if the level of human capital is similar to that of men. In particular, under the deep influ-

ence of Confucianism, South Korea and Japan have inculcated a culture whereby women are

considered socially and financially subordinate to men. Therefore, a large wage penalty for

mothers will encourage mother-workers to leave the labour market, resulting in a significant

loss in terms of human capital utilization.

Both South Korea and Japan have similarities in the basic structure of the human

resources management (HRM) system of lifetime employment and wages based on seniority

along with traditional values regarding women. However, during the Asian financial crisis in

the 1990s, companies were able to flexibly adjust the labour cost, and in this process, the

number of non-career track workers and irregular workers increased. A segmented labour

market is getting worse in both countries, whereby regular and irregular workers were differ-

entiated and differences in working conditions increased. Under such circumstances, the

wage penalty for mothers are expected to be different in low-, middle-, and high-wage groups.

Recently, the focus of econometric analysis has shifted from decomposing wage gaps around

themeantoanalyzingthewagegapacrossthewagedistribution using distributional statis-

tics. However, studies that have decomposed the gender wage gap of parenthood have been

scarce. The present study used the conditional quantile regression models with counterfactual

decomposition of Chernozhukov et al. (2013), and interpreted the results as ‘glass ceiling’if

the wage penalty is high at the upper end or ‘sticky floor’if the wage penalty is high at the

lower end of the wage distribution. This study analyzed the gender wage gap using a fixed

effects model. In addition, the unexplained wage gap of the parent group was defined as gen-

der wage penalty in parenthood using the decomposition method, and discrimination against

mother-workers was analyzed.

Data from the Korea Labor and Income Panel Study (KLIPS) and Japanese Life Course

Panel Survey-Youth (JLPS-Y), which are used in the present study, are not harmonized

data; however, they facilitate empirical comparisons between the two countries because

their variables and the number of cohorts is also similar. Furthermore, such empirical com-

parisons have not been actively investigated in the literature.

Based on the similarities and differences between South Korea and Japan, this study ana-

lyzed the gender wage penalty in parenthood across the wage distribution of the two countries.

In addition, by comparing Japan and South Korea with Australia, we obtain differences and

provide policy implications.

The remainder of this paper is organized as follows. Section 2discusses the reason for ana-

lyzing the cases of South Korea and Japan and presents a literature review. Section 3presents

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