Explaining Income Inequality in Korea: Evidence From Decomposition by Workplace Unionization

This study examines how labor union presence reflects institutional constraints shaping income inequality in Korea from 1998 to 2022. The Oaxaca–Ransom decomposition reveals that before the 2008 crisis, wage gaps were primarily explained by observable characteristics in both unionized and non-unionized workplaces. After the crisis, unexplained components became more prominent in unionized settings, indicating a shift in inequality dynamics. Complementing this, the Juhn–Murphy–Pierce decomposition highlights a deepening role of structural segmentation, particularly in unionized sectors. These findings underscore the limitations of traditional collective bargaining and highlight the need for institutional strategies inclusive of peripheral workers.