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What if you had been less fortunate: The effects of poor family background on current labor market outcomes
Department of Economics, Sogang University, Seoul, Korea.
Department of Economics, Sogang University, Seoul, Korea.ORCID iD: 0000-0002-7902-4683
2015 (English)In: Journal of economic studies, ISSN 0144-3585, E-ISSN 1758-7387, Vol. 42, no 1, 20-33 p.Article in journal (Refereed) Published
Abstract [en]

Purpose– The purpose of this paper is to examine the correlation between childhood poverty and its influence on adulthood wage distribution, where childhood poverty refers to the experience of poverty or poor family background during one’s childhood.

Design/methodology/approach– With data from the Korean Labor and Income Panel Study, a quantile regression technique and a decomposition method are conducted to identify and decompose the wage gap between low (poor) and middle class income groups along the whole current wage distribution, based on a simulated counterfactual distribution.

Findings– The results show that those who had been less fortunate during their childhood were also less likely to have the opportunity to gain labor market favored characteristics, such as a higher level of education, and even earn lower returns to their labor market characteristics in the current labor market. This leads to a discount of about 15 percentage points in the wage, on average, in total for those with underprivileged backgrounds during childhood compared to those with a middle class background. This disadvantage is observed heterogeneously, with a greater effect at the lower quantiles compared to the higher quantiles of the current wage distribution.

Originality/value– This research contributes to the literature by providing a partial understanding of poverty in Korea along with possible causes, including poor family background or childhood poverty, with which the implication of an intergenerational effect is considered.

Place, publisher, year, edition, pages
2015. Vol. 42, no 1, 20-33 p.
Keyword [en]
Family background, Intergenerational transmission, Childhood poverty, Korea labour market outcome, Quantile regression decomposition, Wage distribution
National Category
Economics
Identifiers
URN: urn:nbn:se:hj:diva-25968DOI: 10.1108/JES-10-2013-0143OAI: oai:DiVA.org:hj-25968DiVA: diva2:794430
Note

Special Issue: Poverty and well being in Asia

Available from: 2015-03-11 Created: 2015-03-11 Last updated: 2016-01-14Bibliographically approved

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CiteExportLink to record
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Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
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More styles
Language
  • de-DE
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