Is there a Fatherhood Premium in Korea?

In addition to motherhood penalties, fatherhood premiums have been pointed as sources of the gender pay gap in advanced countries. However, not much is known about fatherhood premiums in Korea where the gender pay gap is the largest among OECD countries. This study purposes to investigate whether there is a fatherhood premium and what are the mechanisms of such premiums. Using data from the Korean Labor and Income Panel study, this study finds that fathers earn 17% more income than non-fathers. 6.3% of income premium is observed with the transition to father after controlling individual heterogeneity using the fixed effect model. Results show that the income premium is related to the wife’s exit from the labor market, and a little is explained by job traits such as working hours, occupations, and employment status. These results give implications not only about the gender pay gap but also about a social problem such as possible selection into fatherhood.