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This paper was prepared by Dong He and Thierry Tressel (APD).
SMEs in Korea are generally defined as companies employing fewer than 300 employees. More specific definitions are stipulated for agriculture and services, with an employment threshold varying between 200 and 30 employees.
From an international perspective, a large and active SME sector is not inconsistent with a dominance of regular jobs: Japan and Germany, for instance, have about 70 percent of wage earners employed in SMEs, even though only 12 percent of employees have nonregular contracts. Another case in point is Ireland, where 72 percent of employees work in SMEs, and less than 10 percent of employees are nonregular workers.
This is the lower bound estimate, obtained by assuming that all nonregular jobs destroyed in 1998 were at SMEs.
75 percent of SMEs in the manufacturing sector supplied more than 95 percent of their output to downstream firms (Kim, 2002).
Daily workers, with less than one month of employment, and part-time workers who work less than 18 hours weekly, could not participate in the EIS before January 2004.
A robust analysis of the performance of those programs controlling for trainees’ characteristics is not available. Thus, the conclusion is only tentative.
The rising demand for skilled workers relative to unskilled workers is illustrated by the observation that the college premium rose from 47 percent in 1995 to 52 percent in 2001 (Jeong, 2003).
As reported by the Ministry of Labor.
A case in point is Hyundai Motor Co. which was able to lay off only 277 employees in 1998 (instead of the 8,000 originally planned), despite a 40 percent capacity utilization rate in March 1998 (Choi and Kim, forthcoming).
For instance, Bentolina and Dolado (1994) show that, in Spain, an increase of one percentage point in the temporary employment share raised the growth rate of permanent workers’ wages by about 0.3 percent.
The OECD (1999) found that the United Kingdom, Denmark, Ireland, the Netherlands, New Zealand, as well as Canada and Australia, had been the best in terms of improving labor market performance.