The effects of structural change and economic liberalisation on gender wage differentials in South Korea and Taiwan

This paper investigates the sources of divergent trends in gender wage differentials in two important newly industrialised economies (NIEs), South Korean and Taiwan. As these economies have entered the 'post-industrial' phase of development, gender wage differentials in Taiwan's manufacturing sector have widened, while in Korea they have narrowed. Decomposition analysis is used to broadly identify sources of change in gender wage differentials.. Multivariate regression analysis is relied on to differentiate the impact on the gender wage gap of (1) macro-level policies, (2) institutional factors, and (3) shifts in labour demand and supply. In addition to the predictable effects of several standard supply-side variables, in Taiwan physical capital mobility is found to have contributed to a wider gender earnings gap. Women's greater concentration in industries where capital is mobile may explain this result. The effect of capital mobility in Korea appears to differ, which may be due to the dissimilar character of outward FDI from that country.