Indian Journal of Industrial Relations: Economics & Social Dev.

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Two Crises, Two Remedies & Two Consequences: Impacts on Korean Labour Market


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1 Graduate School of International Studies, Seoul National University San 56-1. Silim-dong, Gwanak-Gu, Seoul, Korea, Republic of
     

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The recent global financial crisis is similar in many respects to the one Korea experienced in 1997. During both the crises, the exchange rate of Korean won vis-a-vis the US dollar soared, the stock market prices plummeted, and the Korean economy experienced a serious drop in output and then quickly recovered. Despite such similarities, the two crises are different on their impacts on the labour market. While the former was accompanied by massive layoffs and severe unemployment, there was no such impact in the latter. This paper argues that the conditionality of the IMF, especially the macroeconomic and structural policies, as a precondition for its loans is the primary factor that engendered these contrasting and divergent labour market performances. The conditionality was neither necessary nor appropriate. The Korean economy performs better without the conditionality.
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  • Two Crises, Two Remedies & Two Consequences: Impacts on Korean Labour Market

Abstract Views: 287  |  PDF Views: 0

Authors

Woosik Moon
Graduate School of International Studies, Seoul National University San 56-1. Silim-dong, Gwanak-Gu, Seoul, Korea, Republic of

Abstract


The recent global financial crisis is similar in many respects to the one Korea experienced in 1997. During both the crises, the exchange rate of Korean won vis-a-vis the US dollar soared, the stock market prices plummeted, and the Korean economy experienced a serious drop in output and then quickly recovered. Despite such similarities, the two crises are different on their impacts on the labour market. While the former was accompanied by massive layoffs and severe unemployment, there was no such impact in the latter. This paper argues that the conditionality of the IMF, especially the macroeconomic and structural policies, as a precondition for its loans is the primary factor that engendered these contrasting and divergent labour market performances. The conditionality was neither necessary nor appropriate. The Korean economy performs better without the conditionality.

References