Economic Fluctuation and its Impact on Korean Implied Labor Contract

This study seeks to identify factors contributing to the changing direction of the Korean labor market through an analysis of the impact of recent economic fluctuations on Korean implied labor contracts. Such an analysis leads to the conclusion that the increase in the fragility or weak attachment of the implied contract is primarily the result of economic fluctuations, and not changes in employment flexibility, or the emergence of new employment paradigms, such as the concept of "lifetime profession". These latter trends are not as yet reflected in the general profile of the Korean labor market. When compared with that of other groups, the fragility of these contracts has been most evident in large firms, and amongst the populations of those in white-collar employment, those having regular jobs, and those who are highly educated. It should be noted that this current contractual fragility originated as a result of an increase in involuntary turnover during recession. At the same time, there was no corresponding increase in voluntary turnover during the recovery period. This situation is in direct contrast with the US labor market, where fragility in the implied labor contract has resulted both from involuntary turnover during recession, and voluntary turnover during boom times.