WAGE DIFFERENTIAL BY EMPLOYMENT TYPE AND CONTRACT LENGTH

We estimate wage differentials by employment type and contract length using Oaxaca decomposition. In the Economically Active Population Survey of Korea from 2004 through 2008, we find that regular workers receive slightly higher wage rates than non-regular workers after controlling for a standard list of individual attributes. This coincides with the findings in Lee and Kim (2009) and Nam (2007) that wage discrimination explains a very small part of the observed wage differential between regular and non-regular workers. On the other hand, the wage gap between regular and non-regular workers within a subgroup of similar contract lengths can be quite significant. Among workers with longer contracts, regular workers receive significantly higher wage rates than non-regular workers. This result is in line with the findings in Kim and Park (2006) that wage discrimination between regular and non-regular workers is significant after controlling for establishment characteristics.