TY - BOOK ID - 85504183 TI - Labor Market Duality in Korea PY - 2018 SN - 1484360931 1484360915 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Labor KW - Macroeconomics KW - Employment KW - Unemployment KW - Wages KW - Intergenerational Income Distribution KW - Aggregate Human Capital KW - Aggregate Labor Productivity KW - Labor Economics Policies KW - Labor Force and Employment, Size, and Structure KW - Demand and Supply of Labor: General KW - Wages, Compensation, and Labor Costs: General KW - Labor Economics: General KW - Labour KW - income economics KW - Labor markets KW - Active labor market policies KW - Economic theory KW - Labor market KW - Labor economics KW - Manpower policy KW - Korea, Republic of UR - https://www.unicat.be/uniCat?func=search&query=sysid:85504183 AB - Labor market duality is a complex and critical issue for many countries that can lower productivity, contribute to inequality and result in negative externalities. In this paper, I study duality in the Korean labor market and analyze its sources and potential policy options. I find that employment protection legislations and large productivity differentials are the key drivers of Korea’s duality. In addition, applying a general equilibrium search-and-matching model and calibrating it to the Korean economy, I show that well-calibrated flexicurity policies can significantly reduce duality and inequality and raise welfare and productivity. Notably, the introduction of all three pillars—flexiblity, a strong safety net and active labor market policies—is critical for its success. If only one pillar is introduced it can result in negative side-effects and might not reduce duality. ER -