Knowledge Externalities in Regional Labor Markets : Evidence from Occupation-related Knowledge Requirements

Sungchul Cho; Lim,Up

doi:10.15793/kspr.2012.73..014

This paper examines the role of occupation-specific knowledge requirements in wage inequality across regional labor markets in Korea. By employing a hierarchical linear model, this study can help us to understand the sources of wage inequality and to estimate its magnitude more accurately. This study also introduces an alternative way of measuring local knowledge. We use the data from the Korea Network for Occupations and Workers. The major finding is that high knowledge in the areas of business and management, engineering and science has a positive effect on individual wages, while high knowledge in production and design is not rewarded or even penalized in the labor markets. According to the results, knowledge externalities are found mainly in the area of business and management.

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