Comment on “Determinants of Labor Market Participation and Wages of North Korean Female Refugees in South Korea”
Article first published online: 1 JUN 2012
© 2012 The Author. Asian Economic Policy Review © 2012 Japan Center for Economic Research
Asian Economic Policy Review
Volume 7, Issue 1, pages 132–133, June 2012
How to Cite
YU, Y. (2012), Comment on “Determinants of Labor Market Participation and Wages of North Korean Female Refugees in South Korea”. Asian Economic Policy Review, 7: 132–133. doi: 10.1111/j.1748-3131.2012.01226.x
- Issue published online: 1 JUN 2012
- Article first published online: 1 JUN 2012
Based on a 2009 survey of North Korean female refugees who arrived in South Korea in 2007, Yu et al. (2012) use econometric techniques to identify the factors that determine the labor market participation and wages of North Korean refugees in South Korea.
Yu et al. (2012) have two main findings. First, compared with government agencies such as job centers, personal channels lead to a higher rate of labor market participation and higher wages for North Korean refugees. Second, South Korea's basic social security benefits reduce both labor market participation and wages. Job training programs also have negative impacts on North Korean refugees' labor market participation.
Based on their findings, Yu et al. (2012) call for the inclusion in the resettlement packages provided by the South Korean government and nongovernmental organizations of a policy aimed at strengthening the social network that increases interactions between native people and migrants, as well as those among migrants themselves. The authors also see the need for the reform of the National Basic Livelihood Security system to give North Korean refugees more incentives to seek jobs.
The paper is an application of the theoretical and empirical literature on job information network and job search theory to the specific issue of North Korean refugees' adaptation in South Korean. The literature on job information networks is about the use of informal sources of information during job search and its consequences for the job market (Ioannides & Loury, 2004), and the literature on job search theory is concerned with the worker's optimal strategy of job search (McCall, 1970).
The authors use a probit model to estimate the labor market participation function, in view of the fact that the decision to participate in labor markets is a discrete choice, whilst the determinants are continuous or ordinal variables. Self-selection makes it difficult to evaluate government programs. The Heckman procedure is used by the authors to address the self-selection bias.
It seems to me that the theories and methodologies used in the paper are appropriate. The conclusions are in line with my intuition. Here, I would like to raise a few issues for the authors to consider in the future. First, the size of the sample that consists of 289 North Korean female refugees seems small, considering the fact that there are as many as 8 independent variables in the labor supply function. Second, the sample is based on a 2009 survey of North Korean refugees who arrived in South Korea in 2007. The time span of observation is too short, and during this period of time, the global financial crisis hit Korea badly, which may have great but different impacts on the behavior of North Korean refugees. Hence, the estimation results may not be representative. Third, it seems that female refugees are treated more favorably than male refugees, which is not surprising at all in a hosting country which is male dominated. But the estimation results in the paper may become less representative for the refugee community as a whole. Last but not least, Yu et al. (2012) argue that “job finding through both personal contacts and public employment networks increase the probability of finding employment but the former, especially job finding through contacts with South Koreans, is the most effective in finding employment.” This conclusion has important policy implications. It is possible that North Korean refugees have to rely on personal channels to find jobs preciselybecause there is a lack of effective help from the government. Therefore, the government should do more rather less to help those North Korean refugees.
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