Output cost of gender discrimination in the Korean labour market

• Date: 01 December 2019
• DOI: http://doi.org/10.1111/1468-0106.12285
• Author: Hanol Lee
• Published date: 01 December 2019

ORIGINAL MANUSCRIPT

Output cost of gender discrimination in the Korean

labour market

Hanol Lee

Southwestern University of Finance and

Economics, Chengdu, China

Correspondence

Hanol Lee, Southwestern University of Finance

and Economics, 55 Guanghuacun Street, Qingyang

District, Chengdu, Sichuan, 610074, China.

Email: hanollee@swufe.edu.cn

Funding information

Korea University Graduate School Junior Fellow

Research Grant

Abstract

This study constructs and calibrates a macroeconomic

model that explains Korea’s glass ceiling and examines

the output cost of gender discrimination. The model is

based on the span-of-control framework in Lucas (1978).

It is assumed that the source of the glass ceiling is women

requiring more managerial skill than men to be considered

for promotion. According to simulation results, without

the glass ceiling, besides an increase in the share of female

managers, aggregate output also increases by 8.4%. The

output gain from a glass ceiling removal policy is mono-

tonic because the number of workers continues to decline

while the number of managers increases gradually. This

implies that the more effective the policy implementation,

the greater the increase in output.

1|INTRODUCTION

Over the past few decades, Korea has achieved remarkable economic growth, narrowed the gender

gap in education, and improved gender equality. However, gender equality remains an important

issue in Korea. As of 2015, the labour force participation rate for women was 51.8%, which is 22 per-

centage points lower than that of men and below the OECD average of 60%. According to the eco-

nomically active population survey by Statistics Korea (2015), the gender wage gap is at 62.8%.

1

The glass ceiling is an important form of discrimination in the Korean labour market; however, it

receives less focus in the literature. The glass ceiling is a significant problem in the Korean labour

market and is a barrier for women achieving higher positions in their professions. The Federal Glass

Ceiling Commission (1995) in the United States categorizes these barriers as follows: (a) societal bar-

riers that may be outside of the workplace; (b) internal structural barriers within the workplace; and

(c) governmental barriers. In the Korean context, the barriers in the first and second category are the

priority. Specifically, Korean culture forces women to specialize in household production and child-

bearing. Women in their 20s and 30s feel burdened by the work–family balance and find it difficult

to manage their careers. Moreover, women aged 40 and above contend with poor career development

Received: 18 May 2017 Revised: 8 June 2018 Accepted: 10 August 2018

DOI: 10.1111/1468-0106.12285

Pac Econ Rev. 2019;24:659–671. wileyonlinelibrary.com/journal/paer © 2018 John Wiley & Sons Australia, Ltd 659