2016, Vol.25, No.2

Journal of Regulation Studies 2023 KCI Impact Factor : 0.78

pISSN : 1738-7132
https://journal.kci.go.kr/ksrs2002

This paper analyzes the harmful effects on employment and economic growth brought by the minimum wage hike. If the 2017 minimum wage is raised to 10,000 wons, the employment decreases by 241 ~ 506 thousands. If it is raised to 9,000, 8,000, and 7,000 wons, the employment decreases by 173 ~ 311, 125 ~ 154, and 46 ~ 65 thousands, respectively. We have an estimation for 15 OECD countries: The economic growth rate decreases by 0.51 % points as the ratio of minimum wage to the average wage increases by 10 % points. According to this, if the 2017 minimum wage is raised to 10,000 wons, the annual economic growth rate decreases by 1.48 % points. If it is raised to 9,000, 8,000, and 7,000 wons, the rate decreases by 1.11, 0.73, and 0.36 % points, respectively.

It’s been quite a time since the high level of anti-business sentiments in Korea have been one of the major social issues. However, there has been few rigorous research on the matter. In this study, we treat the anti-business as perceptional phenomena associated with information and knowledge rather than emotional judgement. We seek to find the causes of the anti-business and regress on demographic factors, social capital, and economic I.Qs. Economic I.Q. variables here include individual knowledge and information on the nature of the firm and market competition, etc. The results show that the anti-business increases as the economic I.Q. and social trust decrease. This implies that the anti-business can be partly managed by market-friendly education. Furthermore, social trust, which is historically path dependent, should be also improved to reduce the high and persistent anti-business sentiments in Korea.

The present paper aims to estimate economic effect of regulatory reform and tries to investigate growth effect and level effect separately. By utilizing major components of Doing Business Indicators (DBI) of World Bank, it is shown that the level effect persists in two years while we cannot find significant growth effect. The quality of regulation in specific country was calculated as distance to frontier (DTF) of some major components in DBI. When the quality of regulation improves by one unit in DTF, 0.4% increase in GDP per capita in that year along with 0.7% increase in the following year is expected. This result implies that the regulatory reform should be conveyed consistently in order to gain economic benefit.