Effects of Human Capital on the Economic Adjustment of North Korean Defectors

Byung-Yeon Kim ; Seong Hee Kim

Byung-Yeon Kim, Corresponding Author, Department of Economics, Seoul National University, Gwanak-ro 1, Gwanak-gu, Seoul 08826, Republic of Korea, Tel: +82-2-880-6370, Fax: +82-2-880-4061 kimby@snu.ac.kr
Seong Hee Kim, Department of Economics, Seoul National University, Gwanak-ro 1, Gwanak-gu, Seoul 08826, Republic of Korea, Fax: +82-2-880-4061 mapleday@snu.ac.kr

JEL Classification: J22, J61, O17, P20

Abstract

This study investigates the effects of combined human capital of North and South Korea on the economic adjustment of North Korean defectors. Household income and job stability are used as outcome variables. Informal economic activities in North Korea exert a significant and positive impact on economic adjustment in the South. Membership in the Workers’ Party and time spent in the South positively affect household income. Overall, acquired human capital from North Korea appears more important than that obtained from the South. This finding has significant policy implications.

Keywords:

North Korea, Informal economic activities, Human capital, Economic adjustment

Acknowledgments

Byung-Yeon Kim acknowledges financial support by the National Research Foundation of Korea Grant funded by the Korean Government (NRF-2013S1A5A2A03044461).

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