Why Do Improvements in Transportation Infrastructure Reduce the Gender Gap in South Korea

Abstract

This study investigates whether the increases in connectivity across cities help reduce the gender gap in labor market outcomes —a question for which there is limited prior evidence. With its high level of gender disparity, South Korea provides an ideal setting to study this issue thanks to its extensive geocoded micro-panel datasets and a massive expansion of High-Speed Rail (HSR) beginning in 2004. Using an instrumental variable strategy that leverages historical railroads constructed in Korea during the Japanese colonial era, I demonstrate empirically that the gender gap in the South Korean labor market decreased with the expansion of high-speed rail (HSR). Specifically, the gender gap in employment (wages) fell by 20% (16%) in core areas (Seoul metropolitan) and 16% (0%) in non-core regions (outside of the Seoul metropolitan). I employ a spatial general equilibrium model to structurally decompose HSR’s impact into labor demand and supply channels to understand the mechanisms at play. The quantitative decomposition shows that overall, HSR increased labor demand for female-intensive jobs and decreased women’s labor participation costs. Finally, the empirical evidence of the structural estimation is provided that labor demand for local service industries where women are hired more intensively increased most with HSR. In addition, in non-core areas, women’s participation in the labor force was encouraged by improvement in local amenities, particularly in the areas of education and childcare, which reduced women’s childcare burdens

Keywords: High Speed Rail, Gender Gap, Transportation, Local Labor Market

JEL Classification: R4; J16