Working Paper

"What Happens to the Wage Structure When Nearly Everyone Has a College Degree? The Case of South Korea"
Abstract: This study explores the effects of changes in the overall educational attainment of workers on wage and employment structure, exploiting a college education policy that has been implemented in Korea over the past 60 years. The Korean government determines a college enrollment quota for each year, which limits the number of college freshmen. The quota has been binding in all years. This study first estimates the causal effect of the relative supply of college workers to high school workers on the relative wage using the college enrollment quota as an exclusion restriction. It then develops and estimates a dynamic equilibrium model that explains the changes in educational attainment, wages, and employment structure simultaneously. The estimated model is exploited to conduct two counterfactual experiments and the main findings are: (1) when the college enrollment quota is abolished and every college applicant enrolls in college, four-year college enrollment rate increases by 19.1 percentage points on average and this decreases the college wage premium by 40.6 percentage points on average during the sample period. The percentile wage gaps significantly decrease and the proportion of white-collar workers increases by 9.6 percentage points; (2) if there was no technical progress biased to college-educated workers, the college wage premium would be lower by 20.9 percentage points on average and the percentile wage gaps would decrease substantially.

"The Effects of Kindergarten Entry Age, Age-at-Test and Schooling on Educational Achievement"ntry Age, Age-at-aluation"
Abstract: This study separately estimates the effects of kindergarten-entry age, age-at-test and schooling on cognitive skills using the new identification strategy. These three variables are considered to be perfectly multicollinear in the period of compulsory schooling so that it is deemed that it is not possible to identify their effects separately. I exploit summer break as a period when age increases but schooling does not. The variation in survey date in NLSY79-CS and the summer break make it possible to resolve the multicollinearity problem. The instrumental variable (IV) estimation results show that kindergarten-entry age has a positive effect on math scores at younger ages while it has a negligible effect on reading scores.  The age increase during summer break does not improve any test score. Schooling is the most important factor that improves cognitive skills among the three factors. The estimation by regression discontinuity (RD) approach is also conducted as a robustness test and the RD estimation results are consistent with the IV estimation results.  


Abstract: This study estimates pecuniary and non-pecuniary returns to education exploiting regional variations in college attendance rate induced by the College Enrollment Quota Policy in Korea. The Korean government regulates the maximum number of college freshmen that each college can select for each year.  The college quota has worked as a binding constraint that determines the actual number of college freshmen as the number of college applicants has been substantially greater than the college quota. This study employs the ratio of college enrollment quota to the number of 12th graders in the province of residence, which measures the degree of potential competitiveness to enroll in local college right after high school graduation, as an instrument for the years of education. The IV estimates show that an additional year of education increases hourly wage by 10.7-12.7 percent by specification. Education also increases fringe benefits, job satisfaction, and life satisfaction.


"Age Culture, School-Entry Cutoff and the Choices of Birth and School-Entry Timing in South Korea"
Abstract: This study explores how the age culture and elementary school-entry cutoff in Korea affect the decisions of parents on both birth and school-entry timing for their children. There is a traditional method of age calculation in Korea that is different from other countries, and Korea also has a distinctive age culture influenced by Confucianism. Korean age culture, which prescribes standards of behavior according to age, influences parents' decisions about school-entry timing as it relates to the child's Korean age and its effects on peer relationships in school. This study suggests that the distinctive age reckoning and culture strongly affect school-entry timing. This study also provides evidence that deliberate birth-month selection exists in Korea and shows that birth timing is related to school-entry timing.

"Signaling Effects of Layoffs in South Korea" (Submitted) 
Abstract: This study examines an asymmetric-information model of layoffs (Gibbons and Katz, 1991) using Korean data. Contrary to previous studies, a stigma effect of layoffs is observed not only in white-collar but also blue-collar occupations in Korea. The seniority-based wage payment system and low unionization rate in Korea are suggested as possible reasons for this unique finding. 



Publication

"The Effect of Age at School Entry on Long-term Educational Attainment in Korea," The Korean Journal of Labor Economics, 34(1):1-32, 2011.

"Are Recessions Good for Your Health? Unemployment and Mortality Rates in South Korea, 1991-2009," (with Chulhee Lee), Journal of Korean Economic Analysis, 17(3) 131-182, 2011.

"The Effect of Displacement on Job Paths of Older Workers," (with Yonghyun Park), The Korean Vocational Education and Training, 13(3):1-25, 2010.