KJC Korea
Journal Central

This study aims to identify which mechanisms of agglomeration economies have generated inter-regional wage gap between the capital region and the non-capital region in Korea. The mechanisms of agglomeration economies are divided into sharing, matching, and learning mechanisms. Based on the framework of the pioneering work of Glaeser and Maré(2001), we estimate a wage level effect and a wage growth effect by examining the wage patterns of migrants. The former effect implies the sharing mechanism and the latter effect implies the matching or learning mechanisms. Random effects models are used to estimate the wage pattern of migrants from the non-capital region to the capital region between 1998 and 2015. Since the positive correlation between unobserved ability and where to live leads to an upward bias in the estimate, we also use the Hausman and Taylor approach for valid estimation of the wage level effect. Our findings indicate that workers had experienced immediate wage growth shortly after migrating to the capital region. However, their wages did not grow gradually after migrating to the capital region. Among the three mechanisms, we conclude that the sharing mechanism best accounts for the inter-regional wage gap.

This study aimed at analyzing the decisive factors affecting the poverty-exit duration of below the minimum housing standard using the cox proportional hazard model. Empirical results showed that middle-aged and elderly people were more vulnerable to escape from below the minimum housing standard than younger. In the case of housing tenure type, it was found that the poverty-exit duration of below the minimum housing standard for the homeowners was shorter than the renters. For the welfare policy, it was confirmed that direct housing support was the most important factor to reduce the period of escape from housing poverty. In addition, the direct housing support was more effective than non-housing support or housing finance support in order to reduce the poverty-exit duration of below the minimum housing standard. These results suggest that the direct housing support policy may be more effective for reducing the poverty-exit duration of below the minimum housing standard in the short period. Moreover, this study also pointed out that inclusive housing welfare policy for underprivileged, such as elderly is strongly considered.