CPR Working Paper Series No. 79

A new gender wage gap decomposition methodology is introduced that does not suffer from the identification problem caused by unobserved non-discriminatory wage structure.  The  methodology is used to measure the relative size of Korean gender wage gaps from 1994 to 2000 across industries, differentiated by industrial knowledge intensity, where knowledge intensity is the extent to which industries produce or employ high-technology products.  Korea represents an important case study, since it possesses one of the fastest growing knowledge-intensive economies, among industrialized countries.  Empirical results indicate that over this period, discrimination (the unexplained portion of the gender wage gaps) in Korea was statistically smaller in knowledge-intensive industries than in industries with low knowledge intensity.  Also, discrimination was declining on average over the period.  This suggests that continued growth in knowledge-intensive industries in Korea may lead to further declines in the overall gender gap.

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