Endogenous Formation of Ricardian Comparative Advantage and Labor Market Friction: A Quantitative Assessment of Structural Transformation in South Korea

2015 ◽  
Author(s):  
Seung-Gyu (Andrew) Sim ◽  
Kazuhiro Teramoto ◽  
Dongwoo Yoo
Keyword(s):  
Labor Market ◽  
South Korea ◽  
Structural Transformation ◽  
Comparative Advantage ◽  
Quantitative Assessment ◽  
Market Friction ◽  
Labor Market Friction ◽  
Endogenous Formation

scholarly journals Economic growth and labor market friction: a quantitative study on Japanese structural transformation

2016 ◽  
Vol 17 (1) ◽  
Author(s):  
Seung-Gyu Sim ◽  
Seungjoon Oh
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Labor Market ◽  
Structural Transformation ◽  
Capital Accumulation ◽  
Physical Capital ◽  
Labor Market Institutions ◽  
Human Capital Accumulation ◽  
Market Friction ◽  
Labor Market Friction

AbstractThis paper develops a tractable multi-sector endogenous growth model with labor market friction and human capital accumulation to analyze the underlying link between economic growth and labor market institutions. The model, calibrated based on the Japanese structural transformation episodes, demonstrates that lifetime employment system has contributed to unprecedentedly rapid economic growth, by enhancing human capital accumulation and facilitating physical capital formation. The counterfactual experiment finds that had the job durations of a typical worker been 1 year (roughly one tenth of the actual average job duration) for 1960–1990 in the Japanese labor market, the non-agricultural GDP per capita in 1990 would have accounted for 71 percent of the actual values.

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