Effects of Anti-discrimination Law on the Differential between Non-regular and Regular Workers in South Korea

Abstract

South Korea implemented a new anti-discrimination law in 2007. The goal is to reduce the labor condition differentials between non-regular and regular workers. This study analyzes the effect of the law on the wage differential. The data comes from “Survey on Labor Conditions by Employment Type”. For the analysis, the Difference-in-Difference method was used. The result is that, by increasing the working-hours gap with the real monthly wage gap holding, the law alleviates the real hourly wage differential between targeted non-regular and regular workers. However, the law‟s effects on social insurance and fringe benefit are not significant in general. This could be interpreted as firms have more discretion in other labor conditions, rather than in wage or working-hours. Another finding is that the law has no or less influence in reducing the real hourly wage differential for workers without union membership, or young workers. This implies that policy makers should pay more attention to these workers, who might be socioeconomically vulnerable.