Breaking the Vicious Circle: Macroeconomic Perspectives on Policy Interventions for Female Labor Supply and the Gender Wage Gap

This paper examines the interplay between the female labour supply and wages through human capital accumulation in South Korea, highlighting the significant gender wage gap and low female labor participation. Our findings suggest that wage subsidies alone are insufficient for narrowing the gender wage gap. Targeted wage subsidies for households with infants and toddlers can mitigate career interruptions and enhance human capital for women. However, it also attracts lower-productivity women into the labor market, further exacerbating the gender wage gap. Therefore, direct labour market structural reforms, such as the Anti-Gender Discrimination Act, are essential.