Analysis of Pay Inequality and its Impacts on Growth and Performance in the Korean Manufacturing Industry Post Asian Financial Crisis

  • Almas Heshmati Department of Economics, Room GN702, Sogang University, Seoul, Korea
  • Yunhee Kim Department of Economics, Room GN702, Sogang University, Seoul, Korea
Keywords: Economic Growth, Financial Crisis, Kuznets Curve, Pay Inequality, Performance


This paper examines the relationship between pay inequality, economic growth, and performance in Korea. Pay inequality is estimated by using Theil’s index to identify the factors determining the level of pay inequality, and establish its relationship with economic growth and performance. For the empirical results we use panel data on the Korean manufacturing sector for the period 1993 to 2003. It appears that a large portion of rising pay inequality can be attributed to rising relative pay among the small-sized firms, outside the capital city area and in the ICT sectors which were affected by the economic structural reform since 1997. The findings support the hypothesis of an “augmented” Kuznets Curve, according to which certain developed countries are found on an upward-sloping addendum to the original formulation of Kuznets.


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Author Biographies

Almas Heshmati, Department of Economics, Room GN702, Sogang University, Seoul, Korea

Almas Heshmati is Professor of Economics at the Jönköping University (Sweden) and Sogang University (South Korea). He was professor of Economics at the Korea University, Seoul National University, University of Kurdistan at Hawler, RATIO Institute, Stockholm and MTT Agrifood Research, Helsinki and Research Fellow at the World Institute for Development Economics Research (WIDER), The United Nations University, Helsinki during 2001-2004. From 1998 until 2001, he was an Associate Professor of Economics at the Stockholm School of Economics. He has a Ph.D. degree from the University of Gothenburg (1994), where he held a Senior Researcher position until 1998. His research interests include agricultural economics, development economics, energy economics, industrial organization, labor, globalization, income distribution, productivity, efficiency, growth, health care and capital structure. He is member of the Scientific Committee of the International Conference on Panel Data. His publications include papers in the Agricultural Economics, American Journal of Agricultural Economics, Applied Economics, Applied Financial Economics, Econometric Reviews, Economic Theory, Empirical Economics, European Journal of Operational Research, Global Economy Journal, International Journal of Industrial Organization, International Journal of Production Economics, Journal of Applied Econometrics, Journal of Economic Surveys, Journal of Productivity Analysis, Journal of the World System Research, Scandinavian Journal of Economics, Scandinavian Journal of Educational Research, and Structural Change and Economic Dynamics.

Yunhee Kim, Department of Economics, Room GN702, Sogang University, Seoul, Korea

Yunhee KIM, Korean, she is working in the Economic Analysis Coordination Division of the Economic Analysis Bureau at National Assembly Budget Office. She has both a strong background as a researcher, with several publications, and an extensive experience in empirical analysis supporting policy and decision-making, through the positions she held in several international organisations. Until 2015, she had worked in the Cooperate affair, Competition, Industry and Trade in Services Divisions at the OECD in Paris, where she was doing policy and empirical analysis and co-drafting international economic issues on service, finance, and performance. Her field is industrial regulation and innovation policy. She has been studying issues related to innovation policy and empirical industrial organisation for the last 10 years. Prior to joining OECD, she received two PhD degrees, one in Economics from Seoul National University and the other in Industrial Policy from Ecole Nationale Supérieure des Mines in Saint-Etienne. At SNU, her topic was the liberalization of telecoms markets and innovation activities of firms, while at EMSE she focused more on issues related to sustainability and environment applied to industries. She conducted quantitative analyses for the performance and efficiency of nations and industry sectors. In particular, she examined the impact factor of industry policies for firms' innovative investment and concentrated on finding its incentives. Thus far, she have written more than ten research papers including five published SSCI papers and one published SCIE paper.


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How to Cite
Heshmati, A., & Kim, Y. (2017, December 15). Analysis of Pay Inequality and its Impacts on Growth and Performance in the Korean Manufacturing Industry Post Asian Financial Crisis. UKH Journal of Social Sciences, 1(1), 9-21.
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