The `Protectiveness' of Employment Protection Legislation

Similar to labor markets in France, Spain and Japan, the labor market in South Korea is largely divided into the primary and secondary sectors, more commonly referred to in Korea as formal and informal sectors. While formal workers in South Korea benefit from permanent contracts with better insurance coverage and non-salary compensation, workers with informal status have non-permanent contracts and are mostly not entitled to insurance benefits. In 2007 the Korean government implemented employment protection legislation (EPL) to improve the working conditions of informal workers, but the effectiveness of the EPL has not yet been sufficiently assessed. This paper applies an optimal three-state on-the-job sequential search model to estimate the transition rates of workers between different sectors to quantify the effect of the 2007 EPL on worker transition from informal to formal work. I find that the 2007 EPL benefitted both high-school and college graduate men in the informal sector by facilitating their transition into the formal sector. I also find that starting off in the informal sector has a long-term scarring effect for college graduate men, whereas highschool graduate male workers are not negatively impacted by their entry status in the long run.

Screening or Human Capital Accumulationccc? The Role of Informal Sector in South Korean Labor Market

In countries with a dual labor market structure, analyzing the role of the informal (or contingent) sector is of great importance in shaping labor market policies. Being employed in an informal sector may provide workers chances of skill enhancement or may provide employers more information to screen workers into formal jobs. In this paper, I analyze which role is most evidently played by South Korea’s informal sector using a piecewise constant hazard model. Estimated patterns of the hazard functions indicate that informal jobs act more as a screening device for employers in transitioning a worker into the formal sector rather than human capital accumulation for employees in South Korea.

Deaths of Despair in the U.S. and Relative Income

Over the last three decades, the United States has witnessed increased death from suicide, alcohol poisoning, and drug addiction among its less-educated, non-Hispanic white population. Prior research has called this phenomenon “deaths of despair”, pointing to a diverse set of possible underlying causes from economic insecurity to trade shocks. I investigate one of these possible explanations: the relative decreased income of non-Hispanic white men compared to their peers both inside and outside the household. First, I compare changes in income across racial groups by age to account for any changes in non-Hispanic white men’s income relative to that of black and Hispanic men between 2006 to 2016. I also analyze changes in their income relative to household income in order to study their within-household status during the same period. Using data at the constant public-use microdata area (CPUMA) and county level, I find that younger non-Hispanic white male population is more impacted by relative income compared to the older population. A decrease in racial and familial relative income increases deaths of despair among 25-44 year old white male Americans. Results for the older 45-64 year old population indicate that comparing income among themselves and their peers does not drive deaths of despair. Despair of older non-Hispanic white male Americans tend to be lower when they have better familial and regional economic support.

The Patterns of Korea's Foreign Direct Investment in Vietnam (coauthored with Professor Jai Sheen Mah)

The Vietnamese economy has shown very rapid economic growth since Doi Moi, with a huge amount of foreign direct investment (FDI) inflows. Among them, Korea’s outward FDI (OFDI) in Vietnam deserves more attention as the leading investor. This paper reveals the patterns of Korea’s OFDI in Vietnam. The pre-eminence of Korean FDI in Vietnam was the consequence of multiple events, including the coinciding efforts of both governments to promote FDI and Vietnam’s provision of an alternative to China in the manufacturing sector. Korean firms have contributed to economic growth, employment generation and technology transfers in Vietnam. Vietnam can enhance the FDI inflows by overcoming the remaining instabilities in its economy, strengthening the level of human capital and sustaining its investor-friendly policies.