Due to the vigorous export promotion policies persistently
pursued by the Korean government ever since 1962, the exports
of Korea have increased about 100-times during 1960-1973
period, i.e., from $33million in 1960 to $3,225million in 1973. On
the other hand, there has been an increase of total employment
from 6.9 million in 1960 to 10.2million in 1970 -- from0.5 million
to 1.5million in manufacturing sector only.
The average annual growth rate of exports amounted to
nearly 40 percent in Korea during 1962-73, and more than 90
percent of Korea`s exports became labor intensive manufactures.
Since the exports/GNP ratio of Korea has exceeded 25 percent
level in 1973, it would be very interesting to analyze the impact
of such rapid expansion in exports of labor intensive
manufactures on employment in Korea.
The Korean experience seems to be interesting because we
can easily identify a sharp contrast between the pre-1962 period
and post-1962 period in its trade policy, export performance, and
the pattern and magnitude of employment.
The purpose of this research project is to analyze the
impact of export expansion on aggregate as well as sectoral
employment levels. Korea has detailed Input-Output tables for
1960, 1963, 1966, 1968, 1970 and 1973, population census for 1960,
1966 and 1970, quarterly sample survey of economically active
population since 1963, and census or survey of mining and
manufacturing sectors for the entire 1960-73 period. Hence we
can measure the sectoral labor-output ratios for each of 1960,
1963, 1966, 1968, 1970 and 1973, compute the amount of labor
directly and indirectly absorbed in export production during
1960-74 period, and also analyze the impact of increasing labor
productivity on aggregate employment. Because of the
significance of skill constraints in growth process, we will
classify labor into various skill groups, and analyze its
implications on export expansion and import substitutions.
Various government policies often make capital relatively
cheap and induce the adoption of capital intensive technology
and/or the undertaking of capital intensive productions. Those
productions may appear profitable to the subsidized private
entrepreneurs but might will not be profitable for the country as
a whole if correct prices were used. The net effect is to reduce
the employment opportunities. The impact of government subsidy
policies on sectoral factor input combinations and hence on
employment will also be investigated on the basis of the existing
available data. For example. we may investigate whether those
industries which received large amount of government subsidies
in the form of low interest rate bank loans, permit of foreign
loans, or direct government investment and loans are more
capital intensive industries than the industries which could not
receive such subsidies.