The Effect of Labor Force Participation by Women on Family Income Inequality in Korea, Japan, and Taiwan

Abstract

This paper analyses the effect of labor force participation by women on family income inequality in Korea, Japan, and Taiwan. This paper explores two research issues. First, does labor force participation by women reinforce family income inequality due to homogamy or does it contribute to reduce family income inequality with the labor force participation of wives from low-income families? Second, is there a national variation of the effect of labor force participation by women on family income inequality across the three countries? The findings are: (1) the analysis of the SSM data displays that labor force participation by women reduces family income inequality in Korea and Japan, whereas it increases family income inequality in Taiwan, (2) the relative contribution of the wife’s income to family income inequality is the largest in Taiwan and the smallest in Japan, (3) the largest reduction of family income inequality due to the wife’s income is observed in Korea, whereas the lowest reduction is observed in Japan. The negative correlation between the income of a husband and the income of the wife in Korea contributes to the reduction of family income inequality.