Different Types of Liberalization and Jobs in South Korean Firms

Abstract

This study examines the effects of several factors indicating economic openness-imported intermediate goods, total imports, IFDI (inward foreign direct investment), and foreign ownership-on regular, irregular jobs and the ratio of irregular employment to regular employment. Findings revealed that imported intermediate inputs and IFDI affected neither regular nor irregular job figures. However, an increase in total imports led to a decrease in the number of irregular jobs without affecting regular full time jobs, leading to a decrease in the ratio of irregular jobs to regular jobs. On the other hand, changes in foreign ownership structure had a contrary effect, that is, a decrease in the number of regular jobs and an increase in irregular ones, and, thus, an increase in the ratio of irregular jobs to regular jobs. Overall results showed that a rise in imports results in depressed overall employment, irregular employment in particular, while more IFDI results in more irregular jobs replacing regular ones, effectively exacerbating job insecurity. The implication of this analysis is that greater economic openness may have a negative impact on the South Korean labor market overall.