Distributional Approach of the Gender Wage Gap in South Korea: Evidence from Matched Data

Using the RIF-decomposition combined by PSM to control for selection bias, the present study explores patterns of the gender wage gap in South Korea. Our work is believed to contribute to examining the mechanism of the dual structure of the labor market that affects the degree of wage discrimination against female and the existence of a glass ceiling effect. First, as a result of the linear decomposition, the rate of discriminatory gender wage gap is larger than explained part in the overall labor market, and in particular, in the case of SMEs and blue-collar jobs, unexplained part against female workers dominates. Second, there is no glass ceiling and sticky floor effect in the overall Korean labor market. Third, when examining by firm size, especially in the upper percentile of the wage distribution of LEs, gender wage adjustment is mainly driven by the productivity factor. With respect to SMEs, the discrimination against female accounts for most of the raw wage gap in both senior and junior positions. Regardless of whether the region is Seoul area or not, the influence of discrimination on the gender wage gap decreases with upper percentiles, and a glass ceiling is also not observed. From an occupational point of view, in white-collar jobs, the wage gap in upper percentiles is strongly influenced by human capital traits, but in the case of blue-collar jobs, clearly presenting the aspect of the traditional glass ceiling effect. The analysis results of the present study suggest that the pattern of the gender wage gap may be different depending on factors characterizing the dual labor market, so government’s policy direction should simultaneously consider the dual structure of the labor market and gender discrimination.