Gender inequality among urban households in South Korea

Despite female-friendly advances in the South Korean labour market, significant income differentials have persisted not only between male and female workers but also between urban male and female-led households. This study examines the link between gender and income inequality using the household survey data for South Korea. Analysis of variance reveals the dispersion effects of gender account for less than 2% of the total variations in income. While the importance of gender in explaining aggregate inequality is surprisingly small, we found robust evidence corroborating the gender gap hypothesis. Controlling for demographic characteristics, the results show that Korean men-headed households, on average, earn 30% higher income than women-headed households. At the same time, the estimated discrimination effects suggest that the observed male-female income ratio exceeds the income ratio in the absence of discrimination by 26%. Furthermore, households led by a prime-age man with 20 years of on-the-job experience earn, on average, double the income of households led by a prime-age woman with similar qualifications. The results suggest that, while gender inequality remains a formidable challenge in Korea, female household heads in the prime age categories are particularly disadvantaged by workplace barriers against women participation.