An empirical analysis of gender differences in asymmetric labor adjustment: evidence from Korea

This paper documents the difference in asymmetric labor adjustment between male and female employees, as alluded to in the labor economics literature. Based on detailed gender-specific employment disclosures of Korean-listed firms, we report a significant presence of labor cost stickiness. Breaking labor costs down, we further show that labor cost stickiness is mainly attributable to the asymmetric adjustment of employment rather than that of wages. More importantly, this adjustment is more salient for males than it is for females, suggesting that managers tend to dismiss females to a greater extent than males during sales downturns than they recruit during sales upturns. In cross-sectional analyses, we present evidence that formal and informal institutions underlie the asymmetric labor adjustment. Lastly, gender differences in asymmetric labor adjustment widen the tenure gap across gender, which may contribute to the low likelihood of firms appointing and promoting female executives.