01897cas a2200241 a 4500 AALejournalIMF018489 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484357934 1018-5941 BD-DhAAL BD-DhAAL Schauer, Johanna. Labor Market Duality in Korea / Johanna Schauer. Washington, D.C. : International Monetary Fund, 2018. 1 online resource (36 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Labor market duality is a complex and critical issue for many countries that can lower productivity, contribute to inequality and result in negative externalities. In this paper, I study duality in the Korean labor market and analyze its sources and potential policy options. I find that employment protection legislations and large productivity differentials are the key drivers of Korea's duality. In addition, applying a general equilibrium search-and-matching model and calibrating it to the Korean economy, I show that well-calibrated flexicurity policies can significantly reduce duality and inequality and raise welfare and productivity. Notably, the introduction of all three pillars-flexiblity, a strong safety net and active labor market policies-is critical for its success. If only one pillar is introduced it can result in negative side-effects and might not reduce duality. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2018/126 Full text available on IMF http://elibrary.imf.org/view/journals/001/2018/126/001.2018.issue-126-en.xml IMF e-Library