The Immigrant Wage Gap and Assimilation in Korea

46 Pages Posted: 22 Oct 2021

See all articles by Hyejin Kim

Hyejin Kim

Bank of Korea - Economic Research Institute

Chulhee Lee

Seoul National University - School of Economics; National Bureau of Economic Research (NBER)

Date Written: October 20, 2021

Abstract

This study investigates the size of the initial wage disadvantage and the patterns of subsequent labor-market assimilation for immigrant workers in South Korea. We find that immigrants to Korea earn 17-29% less upon arrival than natives with similar characteristics, and the wage gap diminishes by 1.55%p per year spent in the country. The patterns of assimilation differ by both gender and country of origin. Males and Asian immigrants generally follow the patterns for all foreign workers. However, females experience a smaller initial wage difference and no convergence, while immigrants from non-Asian countries and Japan initially earn higher wages than natives, but they then experience a relative decline in wages over time. The results of our out-migration analysis suggest that the negative assimilation of non-Asian and Japanese immigrants may be due to positively selected out-migration. Specifically, the out-migration hazard increases by 6.7% with a 10% increase in wages.

Keywords: Immigrant workers, Wage differential, Assimilation, Out-migration

JEL Classification: J15, J31, J61

Suggested Citation

Kim, Hyejin and Lee, Chulhee, The Immigrant Wage Gap and Assimilation in Korea (October 20, 2021). Bank of Korea WP 2021-16, Available at SSRN: https://ssrn.com/abstract=3946099 or http://dx.doi.org/10.2139/ssrn.3946099

Hyejin Kim (Contact Author)

Bank of Korea - Economic Research Institute ( email )

110, 3-Ga, Namdaemunno, Jung-Gu
Seoul 100-794
Korea, Republic of (South Korea)

Chulhee Lee

Seoul National University - School of Economics ( email )

San 56-1, Silim-dong, Kwanak-ku
Seoul 151-742
Korea

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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