Labor Market Rigidity at Home and Multinational Corporations’ Flexible Task Reallocation Abroad
An unprecedented regime change following the 2017 presidential impeachment led to a dramatic shift to more rigid labor market policies in the Republic of Korea, represented by consecutive double-digit hikes in the minimum wage in the next two years. Using a firm-level data set with detailed information about foreign affiliates for 2013~19, this paper assesses the employment consequences of stricter labor market regulations. The empirical evidence uncovers a relatively unexplored mechanism through which domestic labor market rigidity can potentially reduce domestic employment as multinational firms with flexible internal networks reallocate tasks across borders.
| Main Authors: | , , |
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| Format: | Working Paper biblioteca |
| Language: | English en_US |
| Published: |
Washington, DC : World Bank
2022-06
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| Subjects: | LABOR MARKET RIGIDITY, MINIMUM WAGE, TASK REALLOCATION, MULTINATIONAL CORPORATIONS, MNC, FOREIGN AFFILIATES, EMPLOYMENT ADJUSTMENT, POLITICAL DEVELOPMENT, |
| Online Access: | http://documents.worldbank.org/curated/en/099558206292225157/IDU081e65d43046c7049fa09ee2063cd30a05a4b http://hdl.handle.net/10986/37633 |
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