Minimum Wage Increases and Labor Market Outcomes in South Korea: Heterogeneous Effects Across Demographic Groups and Employment Structure

This study examines the relationship between minimum wage increases and unemployment in Korea using data from 2010 to 2025. The analysis focuses on overall unemployment, demographic-specific unemployment rates, employment structure, and changes in labor market outcomes before and after the COVID-19 pandemic. While minimum wage increases are not significantly associated with the overall unemployment rate, disaggregated analysis reveals heterogeneous effects across demographic groups. Minimum wage increases are associated with reduced unemployment among youth and university-educated workers, whereas unemployment tends to increase among low-educated workers. Furthermore, the post-COVID analysis suggests that the relationship between minimum wage and unemployment became more pronounced following the pandemic. These findings indicate that the employment effects of minimum wage increases are not uniform across all workers but vary depending on individual characteristics and labor market conditions. These findings suggest that policymakers should look beyond aggregate unemployment figures and consider the diverse impacts of minimum wage policy across different worker groups.