Wage differences across industries are observed in the United States and other developed countries, even after controlling human capital and demographic factors. This paper studies the existence of the interindustry wage differentials in the Korean labor market using the panel data set taken from the Korean Labor and Income Panel Study (KLIPS). After controlling the unmeasured worker characteristics, no significant wage differentials were found for any industry. Given the results, industry affiliations themselves do not play an important role in determining the wages of Korean workers. As a check of possible endogenous self-selection related to the job movement, an examination of worker mobility patterns across industries is not consistent with the predictions of the efficiency wage hypothesis.
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