The Earnings Effect of Inter-Industry Technology Differences: A Comparison of the Self-Employed and Wage Earners

This paper compares the earnings effect of inter-industry technology differences between the self-employed and wage earners. It is assumed that primary skills utilized by the self-employed and paid workers differ in nature, and thus the earnings effect of technology differences and its skill-biasness also differ for each type of workers. For the empirical analysis, Heckman’s two-stage method and quantile regressions are fitted to Korean panel data. The earnings effect of technology differences turns skill-biased for wage earners (job-specific skills), but prevails for all self-employed workers (entrepreneurial skills) regardless of their schooling level. This sectoral difference holds for each different quantile of earnings distribution.