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On using mandatory retirement to reduce workforce in korea

Author

Listed:
  • Joonmo Cho
  • Sunwoong Kim

Abstract

Since the financial crisis in 1998, many Korean corporations with low profitability and excessive liabilities cut operating costs. They had to deal with exorbitant wage increases that outpaced productivity and were generated by the traditional seniority-based wage system. The empirical analysis of this study suggests that those companies with many long tenure workers under the Japanese-style personnel management system are more likely to utilize mandatory retirement in order to adjust employment. Moreover, blue-collar jobs are more likely to be associated with mandatory retirement. This suggests that the labour unions may tacitly approve of this practice.

Suggested Citation

  • Joonmo Cho & Sunwoong Kim, 2005. "On using mandatory retirement to reduce workforce in korea," International Economic Journal, Taylor & Francis Journals, vol. 19(2), pages 283-303.
    • Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:283-303
    DOI: 10.1080/10168730500080550
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    References listed on IDEAS

    as
    1. Hashimoto, Masanori, 1981. "Firm-Specific Human Capital as a Shared Investment," American Economic Review, American Economic Association, vol. 71(3), pages 475-482, June.
    2. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-1284, December.
    3. Morley Gunderson & James E. Pesando, 1980. "Eliminating Mandatory Retirement: Economics and Human Rights," Canadian Public Policy, University of Toronto Press, vol. 6(2), pages 352-360, Spring.
    4. Chiang, Sin-Hwan, 1986. "Cost Savings, Wages and the Growth of the Firm," Economic Journal, Royal Economic Society, vol. 96(383), pages 798-807, September.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Chulhee Lee & Jinkook Lee, 2011. "Employment Status, Quality of Matching, and Retirement in Korea Evidence from Korean Longitudinal Study of Aging," Working Papers WR-834, RAND Corporation.
    2. Hyejin Kim, 2019. "Retirement and Cognitive Ability in Korea," Korean Economic Review, Korean Economic Association, vol. 35, pages 393-415.
    3. Wehn‐Jyuan Tsai, 2018. "Mandatory Retirement and Older Worker Employment Decisions: Evidence from a Matched Difference‐in‐Differences Estimator," Pacific Economic Review, Wiley Blackwell, vol. 23(4), pages 590-608, October.
    4. Giles, John T. & Wang, Dewen & Cai, Wei, 2011. "The Labor Supply and Retirement Behavior of China's Older Workers and Elderly in Comparative Perspective," IZA Discussion Papers 6088, Institute of Labor Economics (IZA).
    5. Hae-Chun Rhee & Kwangho Woo & Joonmo Cho, 2014. "Identifying the winners under the Age Discrimination Prohibition Legislation in Korea: policy remedy for redistribution," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 19(1), pages 186-201, January.
    6. Chulhee Lee, 2010. "Labor-Force Participation of Older Males in Korea: 1955 to 2005," NBER Chapters, in: The Economic Consequences of Demographic Change in East Asia, pages 281-313, National Bureau of Economic Research, Inc.
    7. Klassen, Thomas R., 2012. "The Future of Contractual Mandatory Retirement in South Korea," CLSSRN working papers clsrn_admin-2012-6, Vancouver School of Economics, revised 19 Feb 2012.
    8. Jun, Hankyung, 2020. "Social security and retirement in fast-aging middle-income countries: Evidence from Korea," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    9. Chulhee Lee, 2008. "Retirement Expectations of Older Self-Employed Workers in Korea: Comparison with Wage and Salary Workers," Korean Economic Review, Korean Economic Association, vol. 24, pages 33-71.

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