Policy Study 

Abstract: Using plant level panel data on Korean manufacturing during the 1990-98 period, this study tries to assess the role of entry and exit in enhancing aggregate productivity, both qualitatively and quantitatively. The main findings of this study are summarised as follows. First, plant entry and exit rates in Korean manufacturing seem quite high: they are higher than in both the United States and several developing countries for which comparable studies exist. Second, in line with existing studies on other countries, plant turnover reflects underlying productivity differentials in Korean manufacturing, with the “shadow of death” effect as well as selection and learning effects all present. Third, plant entry and exit account for as much as 45 and 65 per cent in manufacturing productivity growth during cyclical upturn and downturn, respectively. This study also shows that plant birth and death are mainly a process of resource reallocation from plants with relatively low and declining ...

Abstract: Korean Abstract: 본고는 2000년대 이후 북한 경제정책의 흐름에 대한 정확한 실태조사, 그중에서도 이들 정책이 경제 전반 및 각 경제주체들에게 미친 영향에 대해 분석하는 것을 목적으로 한다. 북한의 경제정책은 각 경제주체들의 행동양식과 주민들의 일상생활에까지 알게 모르게 영향을 미침으로써 현재 북한경제의 모습을 구성하는 데 결정적인 역할을 한 것으로 평가되므로 이를 심층적으로 분석하는 것은 매우 중요하다. 2000년대 북한 경제정책의 기조는 대략 5~6년을 주기로 반복되었다. 하지만 당국이 지향하는 핵심 가치는 붕괴된 계획의 기능을 제대로 복원하는 것이었으며, 가장 신경을 써왔던 문제 중 하나는 국정가격과 시장가격의 격차를 줄이는 것이었다. 하지만 조치가 내려진 이후 시장 가격 및 환율이 원래 수준 또는 그 이상의 수준으로 급격하게 상승하는 일이 반복해서 발생했다. 이에 따라 국정가격과 시장가격의 차이는 점점 더 벌어지게 되었고, 시장화 속도는 더욱 빨라지게 되었다. 이러한 과정은 다시 달러화⋅위안화 현상을 심화시키기도 했다. 사회주의 국가에서 볼 수 있었던 비공식화 가설과 유사한 패턴을 보인 것이다. 비공식화 가설이 성립되기 위해서는 세 가지 요건이 충족되어야 한다. 즉, 경제활동에서 비공식부문의 비율이 높으면서 변화도 빠르게 진행될 것, 이에 반비례하여 공식부문은 축소될 것, 계획의 작동을 방해할 정도의 뇌물수수 행위가 만연해 있을 것 등인데, 북한이 이러한 모습을 보이고 있는 것이다. 이를 확인하기 위해 북한이탈주민 1,010명을 대상으로 서베이를 실시했다. 그 결과, 전체 가구 소득에서 비공식 부업이 담당하는 비율은 약 52.1%를 차지했다. 특히 2005년 이전에는 그 비율이 43.4%에 불과했으나, 2011년 이후에는 63.5%에 이르게 되었으며, 이러한 차이는 통계적으로도 유의한 것으로 나타났다. 부업을 경험한 비율도 점점 높아지고 있었으며, 부업에 종사한 이유가 ‘생계형’에서 ‘사업 및 소비형’으로 진화하는 것도 확인했다. 공식부문이 축소되는 현상은 국가계획에 따라 생산물을 처분했던 비중, 식자재⋅소비재 의존도 등 주민생활과 관련된 수치들을 통해 유추해 볼 수 있었다. 또한 비공식화 현상이 달러화⋅위안화 현상으로 이어지고 있다는 점도 확인했다. 끝으로 로지스틱스 회귀분석을 통해 주로 어떠한 특성을 가진 주민들이 경제조치에 영향을 받았다고 느꼈는지 검증했다. 이에 따르면 가구의 소득에서 비공식 부업이 차지하는 비중이 공식 직업보다 높을수록(52%), 화폐개혁을 경험했던 사람일수록(35배) 정책의 영향력을 체감할 확률이 높은 것으로 나타났다. 반면, 교육수준, 당원 여부, 직업 종류, 소득계층 등은 별다른 영향을 미치지 못했다. (...) English Abstract: Dominating not only the actions of economic players but also the daily lives of citizens, economic policies play a fundamental role in the shaping of North Korea as we know it. Needless to say, analyzing the progress and significance of these policies is imperative in understanding the “enigmatic economy.” Accordingly, this paper examines the direct and indirect economic impact of the North’s major policy trends and measures upon entering the 21st century. The keynote address on economic policy was delivered every 5-6 years during the 2000s. The main objective of the North Korean government, above all else, was to restore the collapsed planning function of the economy by resolving the disparity between official and market prices. Following the implementation of subsequent measures, however, market prices and the North Korean won rapidly reverted back to their original high levels, even exceeding them in some cases. In fact, the price gap widened further and marketization gained speed. This, in turn, has exacerbated the dollarization and yuanization of the North Korean market, presenting a phenomenon resembling that of the ‘informalization’ seen in other socialist nations. To confirm, a survey was conducted on 1,010 North Koreans residing in South Korea. The survey results reveal that 52.1% of household income was generated from informal sectors. Specifically, the share of household income from informal sectors increased from 43.4% before 2005 to 63.5% after 2011, presenting statistical significance; the reasons as to why have changed from “survival” to “consumption and business purposes.”The diminishing role of the public sector can be conjectured from figures related to the people’s daily lives, including the dependency level for food items and consumer goods and share of disposed products as a result of national planning policies. It was also found that informalization is evolving into dollarization and yuanization. Finally, a logistics regression analysis, using the survey results, examined the characteristics of people who claimed to be influenced by economic policies. Accordingly, the results show that those with a larger share of informal income (52%) than formal income and those who actually experienced the 2009 Currency Reform were more susceptible. Meanwhile, the level of education, participation in government, type of job, and income levels were found not to have much relevance. This implies that, the more people are exposed to informal sectors, the more they are influenced by economic policies. (...)

Abstract: People's concern about their relative status is regarded as an explanation to the Easterlin paradox, which reports that happiness has not increased despite continued growth in average income. The strength of concerns about relative position varies across people. First, we examine the socio-demographic characteristics and values that lead to a strong relative concern. And then we comprehensively investigate differences in financial outcomes, health, happiness, and behaviors by the degree of relative concern. In particular, Korea is an appropriate country for this study as Koreans have experienced rapid economic growth and there exists severe status race in their education system and labor market. Using data from our experimental survey of 3,000 Koreans, we examine their preference for positional goods and behaviors regarding herding, status seeking, and altruism. Our results show that those who have stronger relative concerns are more likely to live in upscale districts and place economic values above non-pecuniary values, and, in reality, they have better financial outcomes. They also exhibit higher tendencies of overconsumption and conspicuous consumption. Their health, however, is worse than others, specifically in regards to psychological health. Moreover, overall happiness and satisfaction in every dimension are proved to be lower for those who have stronger relative concerns. In a series of hypothetical situations of our survey, they consistently show higher inclinations toward status race and herding but lower degrees of altruism or sympathy. As for policy implications, we discuss the following issues. First, we show Koreans' diagnoses of the reasons for their unhappiness and examine how relative concern affects such diagnoses. Second, we discuss government intervention to remedy positional externalities based on our survey results about people's perceived positionality of selected goods that have a negative influence on others' welfare. Third, we show that Koreans' relative concerns do not necessarily arise from their materialistic values and they are undergoing transformation of individual values toward post-materialism, which makes a room for remedial change of institutions that have led excessive social comparisons and competitions. Fourth, we discuss policy directions for reducing negative effects of social comparison in the context of contemporary Korea focusing on the education system and labor market reform. Last but not least, we suggest some examples of nudge ideas using people's relative concern for the whole society and the motivation of self-improvement via social comparison, which implies that relative concern can be made good use of as well.