New evidence on the Korean wage curve

Abstract

Our new empirical evidence suggests that wages are substantially flexible in South Korea. In particular, our longitudinal evidence on the wage curve follows the minus-point-one rule, set up by Blanchflower and Oswald (1994) and is consistent with evidence from other countries.

Acknowledgements

The authors are grateful to valuable comments from seminar participants in the Hanyang-Kobe joint conference. This work was supported by the research fund of Hanyang University (HY-2004-I).

Notes

¹ See Blanchflower and Oswald (2005) for a complete review of these studies.

² See McDonald and Solow (1985) among others.

³ Until now, only Bratsberg and Turunen (1996) presented longitudinal evidence on the wage curve with unobserved individual fixed effects controlled for.

⁴ This choice of optimal weighting is based on a formal test suggested by Solon et al. (1997).