Labor Market Rigidity at Home and Multinational Corporations' Flexible Task Reallocation Abroad

An unprecedented regime change following the 2017 presidential impeachment led to a dramatic shift to more rigid labor market policies in the Republic of Korea, represented by consecutive double-digit hikes in the minimum wage in the next two years. Using a firm-level data set with detailed informat...

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Bibliographic Details
Main Author: Ahn, JaeBin
Other Authors: Choi, Jaerim, Chung, Sunghoon
Format: eBook
Language:English
Published: Washington, D.C The World Bank 2022
Subjects:
Mnc
Online Access:
Collection: World Bank E-Library Archive - Collection details see MPG.ReNa
Description
Summary:An unprecedented regime change following the 2017 presidential impeachment led to a dramatic shift to more rigid labor market policies in the Republic of Korea, represented by consecutive double-digit hikes in the minimum wage in the next two years. Using a firm-level data set with detailed information about foreign affiliates for 2013~19, this paper assesses the employment consequences of stricter labor market regulations. The empirical evidence uncovers a relatively unexplored mechanism through which domestic labor market rigidity can potentially reduce domestic employment as multinational firms with flexible internal networks reallocate tasks across borders
Physical Description:49 pages