Labor Market Inequality in Overall Monetary and Non-monetary Rewards in South Korea

This paper examines the inequality of overall labor market rewards in South Korea for 2023 by combining monetary and non-monetary rewards. Using data from the Korean Labor and Income Panel Study (KLIPS), we estimate non-monetary rewards via OLS regressions, measuring the correlation between occupations and life satisfaction, and then scale the results into wage-equivalent units. Although descriptive in nature, our findings suggest that the non-monetary rewards of occupations increase overall inequality, as indicated by the standard deviation, the 90-50 gap, and the 50-10 gap. Whereas wage inequality is more pronounced in the top half of the distribution, inequality of nonmonetary rewards is more pronounced in the bottom half. Including non-monetary rewards also narrows gender gaps but widens education gaps. When comparing the monetary and non-monetary rewards associated with atypical work schedules and public sector employment, we find evidence consistent with the theory of compensating wage differentials. The results highlight the importance of considering both monetary and nonmonetary rewards when assessing labor market inequality, with implications for researchers seeking to better measure inequality and for policymakers designing interventions to reduce disparities.