Female labor force participation determinants in South Korea

Female Labor Force

Determinants of Female Labor Participation Rate

The rate of participation of females in the Korean labor force is a subject in need of extensive study, as certain large-scale trends present educational and employment trajectories seemingly at odds with each other. While female enrollment in tertiary school has increased along with rapid economic growth in the country (and the region), many Korean women still work as unpaid laborers in family businesses and neither have nor are trying to obtain an individual and direct means of income or regular employment. Despite the fact that economic, social, and political developments in the latter half of the twentieth century and into the current era have led to profound changes in the status and culturally acceptable roles of women in Korea, the People's Daily Online (2011) reports that South Korea still has the lowest proportional level of educated females in the regular workforce of any OECD country. Compared with a country that has achieved a great deal more success in the integration of females into the workplace, such as the United States, South Korea still has fairly restrictive cultural values in terms of individual rights, freedoms, and equality, all of which could have a potential impact on the rate of female participation in the workforce.

By better understanding the factors that contribute to females' decisions of whether or not to join the workforce, practical changes that could achieve greater levels of equality and independence for women in South Korea might be suggested. This research set out to examine which factor or factors have the biggest impact on female employment in an effort to address the seeming inconsistencies between female's participation in education and employment in South Korea. It is hypothesized that issues such as marriage and education, which are seen as major influential factors in female's workforce entrance and exit decisions in the United States, will have the largest influence on employment decisions, yet other factors are also examined. Previous studies and forecasts of labor fore participation incorporate a range of effects including historical changes in behavior, differences across individuals and cohorts in terms of the effects of policies and rewards for work, and the culture that is being examined, and this research also examined several variables in these areas to develop a comprehensive and accurate model for the prediction of female workforce participation.

In the following sections, previous research and existing theoretical frameworks will be presented and discussed as background for the current research presented in the latter sections of this report. The sources of data and the definitions of the basic statistics examined in terms of female employment decision-making influences will then be presented, followed by a section providing an overview of the regression analysis techniques used to determine the model of best fit for the selected statistics and the degree of influence each independent variable was seen to have. These results are then discussed in context of the direct findings of the research and the larger-scale implications they have in the context of female employment in South Korea, with the model of best fit and a quantifiable analysis of various effects on labor force entrance and exit decisions delivered. Finally, this research concludes with a brief and general summary of the findings and results, and suggests manners in which South Korea can encourage greater participation by females in the labor force.

Section 2: Theory and Prior Research

Though specific research detailing the specific factors that influence the decision by cohorts of female to enter or exit the labor force has not been especially extensive, issues involving or related to females in the labor force have been the subject of much previous attention in recent decades. Cultural factors and the way in which certain life events or situations are perceived have been identified as major contributors to the decisions made in this regard; for example, maternal status (i.e. whether or not a woman has children) is known to have a significant influence on the perception of the decision to seek or maintain employment although acceptance of working mothers has grown significantly (Smith, 1981). Age, on the other hand, is and remains a negative influence on female labor force participation, with an increase in age correlating to a lower likelihood of employment (Waite, 1981). Research such as this makes it clear that there are a variety of influences on females' decision whether or not to join the labor force, and also shows that determining these influential factors and their degree of influence can be quite complex in a dynamic environment due to the shifting of cultural influences on choice and perception (Smith, 1981; Waite, 1981).

Other research shows the complex relationship between economics and education in influencing women's participation in the Korean labor force. On the one hand, women that have achieved at least a middle-school education are more economically active -- i.e. participate to a greater extent in the labor force -- yet at the same time women from lower socioeconomic backgrounds are also more likely to seek and achieve regular employment as part of the labor force than women from a higher economic standing and cultural status (Nam, 1991). Generally speaking, women of a higher socioeconomic background are more likely to achieve higher levels of education, meaning that these two influences are slightly at odds with each other and create especially complex conflicts for educated women of a high economic/cultural standing, as they have both an individual impetus and familial ability to achieve an education at a high level, yet also face cultural inhibitions against their employment due to a lack of need and it being seen as an irregularity in Korean society (Nam, 1991). More recent research has found that despite increasing equality in employment access leading up to the Asian economic crisis a decade ago, wage disparities remain substantial and the crisis itself setback employment equality substantially (Kim & Voos, 2007).

Other influences on employment that have been identified as especially important in Korean culture include familial issues and other class motives, including intrinsic cultural pressures such as perceptions regarding employment generally as well as certain types and areas of employment specifically (Kim, 1997). For factory workers, very near the bottom of the socioeconomic adder in South Korea, there is often a divide between traditional family values and expectations and the desire for upward class and economic ability that a factory job is seen as potentially providing, creating a conflict of influences and motivations in the lower classes similar to that observed between education and economic prosperity in the middle and upper classes (Kim, 1997). For countries that have only experienced market economies and economic liberty and modern growth for the past few decades or half-a-century, including South Korea, there are a host of other economic, political, and cultural complications hat do not exist in more developed countries or those that have experienced greater levels of democratization and market capitalism for longer periods (Aslanbeigui & Pressman, 1994). These complications have even made it difficult to determine whether or not women are benefiting from industrialization and increased economic opportunities at all, let alone what the various factors influencing this issue might be; in South Korea particularly, the high degree of growth and rapid increase in prosperity has made it difficult to accurately and reliably trace employment trends, with controversy surrounding most official and many academic reports (Aslanbeigui & pressman, 1994). It is against this backdrop of mixed findings and controversial statistics regarding South Korea's labor force and female participation that this research is being undertaken.

The underlying framework or the conducting of this research finds its precedent in other quantitative measures of the same basic variables, and in largely similar contexts (Fernandez & Rodriquez-Poo, 1997). Essentially, models have been created that position employment status as a dependent variable, with a changing though relatively focused set of independent variables multiplied by unknown coefficients in order to determine this employment status (Fernandez & Rodriquez-Poo, 1997). Progit and Logit analysis have been regularly utilized and well vetted in terms of identifying the appropriate coefficients for these independent variables and thus the full scope of the models that provide the best fit to observable employment statistics and other measures (Fernandez & Rodriquez-Poo, 1997). This background research and previously established framework were utilized to ensure the validity of this research's results.

Section 4: Analysis

LOGIT Pooled tests were conducted on the data from each year of the panel survey utilized as the dataset in this research, with different models used in the LOGIT analysis to enable a comparison of different data configurations and interactions. After a host of such testing and analysis, the Model 4 Logit test for 2009 was selected for further analysis, interpretation, and discussion because a) 2009 was the most recent year for which data was available, and b) Model 4 contained the highest level of significance across all variables and provided the most comprehensive model of best fit for the observed data. Employment was the sole dependent variable in all models; in Model 1, independent variables included were age, health, and status as a student, Model 2 used these same independent variables with the addition of marital status; Model 3 added the first of two education measures; and finally Model 4 included all identified potential independent variables: age, health, status as a student, marital status, and two different measures of education. As the most comprehensive model and the model with the highest level of significance across the independent variables, Model 4 was deemed to be especially reliable in its predictive/correlative value.

Section 5: Discussion

The analysis performed on the data did not just yield a model of best fit, but also provided coefficients for each of the independent variables that help to determine their significance and level of influence on female participation. The independent variables had both positive and negative influences on levels of labor force participation, with a positive health status, and the second measure of education both tending to influence greater levels of female participation in the labor force, while increases in age, being married, being a student, and the other educational measure all had a negative effect on participation levels. More specifically, an increase in age of one year was correlated with a reduction of 0.3% in the likelihood that a woman would be employed, while being a current student had a much more dramatic effect, reducing the likelihood of employment by more than thirty percent. This is more than twice the impact that marital status had; women who are married are just under fifteen percent less likely to be employed than their unmarried counterparts, and finally the first of two educational measures led to a reduced likelihood of female participation in the labor force of just over eight percent. A positive health status, on the other hand, increased the likelihood of female labor force participation by twenty-eight percent, while the second educational measure increased labor participation by 0.5%.

This research has some direct and profound implications for future economic research in the area of influencing greater equality in the workforce and in labor force participation in South Korea. Clearly, there are many factors at work that inhibit the rate of female participation in the labor force, some for purely cultural reasons. While being a student or having poor health might lead to practical problems in seeking regular employment, marriage and education should not be barriers to employment, whether of a directly practical or a more perception-driven cultural type. Further research must take these factors into account when developing assessments of the labor pool, productivity, and programs meant to enhance equality.

Section 6: Conclusion

This research did not identify any surprising new variables or trends in the rate of female participation in the labor force in South Korea, nor did it set out to do so. The variables that contribute to labor force participation rates have been fairly well-established by previous research, yet remained poorly understood in the modern context of the South Korean economy and culture. This research sought to bring existing knowledge of potential influences and models for labor force participation rates into the modern era with a more thorough quantitative analysis than has been recently conducted, and in this endeavor it was largely successful: a fairly accurate and comprehensive model for the decision of whether or not to participate in the labor force was created, supported both by previous research in the area and theoretical/analytical frameworks utilized by the research community. Student status, marital status, health, education, and age all play important roles in influencing the rate of female labor force participation, and the pooled tests show that these influences remain in play from year to year. Initial research also suggests that the significance of each variable is evolving, however the dataset, period, and analysis conducted are not enough to provide conclusive results in this regard. Future research is certainly called for in this area in order to determine what evolutions are taking place, if there are other factors that have a significant impact on female labor force participation rates, and how policies might be implemented or changed to encourage greater inclusivity of females in the labor force.