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A Gendered Social Accounting Matrix for South Korea Hans Lofgren Kijong Kim Marzia Fontana

A Gendered Social Accounting Matrix for South Korea Hans Lofgren Kijong Kim Marzia Fontana. Presentation at the Annual Meeting of the project “Care Work and the Economy – Advancing Policy Solutions with Gender-Aware Macro-economic models” (CWE-GAM), held in Glasgow, June 30 – July 2, 2019.

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A Gendered Social Accounting Matrix for South Korea Hans Lofgren Kijong Kim Marzia Fontana

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  1. A Gendered Social Accounting Matrix for South KoreaHans LofgrenKijong KimMarzia Fontana Presentation at the Annual Meeting of the project “Care Work and the Economy – Advancing Policy Solutions with Gender-Aware Macro-economic models” (CWE-GAM), held in Glasgow, June 30 – July 2, 2019.

  2. 1. Introduction • The 2014 Social Accounting Matrix (SAM) that is presented will be the key data input to forthcoming analysis of gender and care in Korea based on GEM Care, a computable general equilibrium (CGE) model. • In outline: • The Structure of a SAM for GEM Care • Data and steps for building the SAM for Korea • SAM-based description of care, gender, and economic structure • Next steps in the SAM work

  3. 2. The Structure of a SAM for GEM Care • A SAM is an economywide consistent representation of the payments in an economy, linking production, primary factors, and institutions. • To meet the needs of GEM Care, this SAM defines the economy broadly to cover not only what is part of GDP but also household service production and leisure, to which values are imputed on the basis of replacement and opportunity costs.

  4. Table 2.1. Stylized SAM for GEM Care

  5. Table 2.2. Accounts and cell entries in stylized SAM for GEM Care

  6. 3. Data and steps for building the SAM for Korea • The gendered Korea SAM has the same structure as the SAM of Section 2 – it is just more disaggregated in critical areas. • It is accompanied by time use data, disaggregated to match the entries in the SAM for labor value added. • The procedure followed in building the gendered Korea SAM: • SAM0 – complete coverage of the GDP economy but not appropriate for economic analysis as is; • SAM1 – refined to meets the basic needs of CGE analysis; • SAM2 – household disaggregated and addition of accounts to cover the household (or non-GDP) economy; and • SAM3 – aggregated for this presentation (in non-core areas).

  7. Data sources • SAM0: • Korean Supply and Use Tables (SUTs) (OECD 2018) for 2014 • Macro SAM, based on data in the SUTs (ensuring consistency), Bank of Korea (2018), and IMF (2018a, 2018b) • SAM1 – refined to meets the basic needs of CGE analysis; • SAM2 – household disaggregated and addition of accounts to cover the household (or non-GDP) economy; and • SAM3 – aggregated for this presentation (in non-core areas).

  8. SAM0 – a basic SAM • Built from Korean Supply and Use Tables (SUTs) and a Macro SAM (based on data from Bank of Korea and IMF) • SAM0 is 142 x 142 matrix. • Sector disaggregation (63 commodities and 62 activities) comes straight from the SUTs. • Problem with SAM0: Value-added is not split into labor and capital but into • compensation of employees; and • operating surplus and mixed income, including the incomes of self-employed or non-wage labor.

  9. Table 3.1. Macro SAM for Korea 2014 (% of GDP)

  10. Notation for Table 3.1.

  11. SAM1 – a SAM good for GDP analysis • Changes made in two areas (using SAM0 as starting point): • Value added transformed to have a labor - capital split • Service sectors transformed to single out care sectors (SUT disaggregation is inadequate) • More on (1): • Disaggregation of wage labor based on activity-specific wage income data for 8 labor types (gender, 2 education levels, regular and non-regular • Extraction of incomes of non-wage labor from mixed income on the of data on hours of non-wage labor, hours of wage labor, and assumption that imputed wage of non-wage labor is 75% of the market wage for non-regular labor. • More on (2): • Aggregation of service sectors that encompass care and production of care and substitutes for other household services. • Imposition of extraneous data for the care and household-service substitutes • Creation of residual miscellaneous service sector. • Adjustments of household service consumption

  12. SAM1 – a SAM good for GDP analysis (cont.) • Data sources for the above adjustments: • Statistics Korea (Kostat). 2014b. Household Income and Expenditure Survey. • Statistics Korea (Kostat). 2014c. Local Area Labor Force Survey. • SAM1 is (also) a 142 x 142 matrix (a coincidence!) • Problem with SAM1 (given project objectives) • No coverage of household care and other services (not part of GDP) • No disaggregation of households

  13. SAM2 – a SAM good for project purposes • Changes made in two steps (using SAM1 as starting point): • Disaggregation of the single household to 3 types • with children with head in working age; • without children with head in working age; and • with elderly head • Extension of SAM to cover household (non-GDP) service production; • Step 1 (still within the GDP sphere): • Creation of disaggregated rows and columns for the 3 household accounts, calibrated so that the sum of each group of 3 new cell entries equal the value for the relevant cell for the single household; • Balancing of each of the 3 household accounts by scaling the consumption items of the 2 smaller households (the elderly and those with children) with residual adjustments for the larger household (without children).

  14. SAM2 – a SAM good for project purposes (cont.) • Step 2: • Definition of imputed values – time in hours times imputed hourly wages – for household time in leisure and service production for own consumption. • The opportunity cost of an hour in leisure is defined as the average wage for the relevant labor type. • The replacement cost of one hour in production of household services is the average wage for the labor that provides the substitute market service. • Service production is split by household (3 groups) and service type (child care, elderly care, and other services). • These values are used to define • household consumption of leisure and household services • labor value added in the production of leisure and household services. • After linking values for production activities and related outputs, these extensions do not create any imbalances.

  15. SAM2 – a SAM good for project purposes (cont.) • The SAM is a 192 x 192 matrix. • Data sources: • Korea Labor Institute (KLI). 2014. Korean Labor and Income Panel Study, 17th wave. • Korean Women's Development Institute. 2014. Korean Longitudinal Survey of Women and Families. • Ministry of Education. 2014. Annual Education Statistics. • Ministry of Health and Welfare. 2014. Annual statistics on childcare centers. • Statistics Korea (Kostat). 2014a. Farm Household Economy Survey. • Statistics Korea (Kostat). 2014b. Household Income and Expenditure Survey. • Statistics Korea (Kostat). 2014d. Time Use Survey.

  16. SAM3 – a SAM that works better for Section 4 • SAM3 is identical to SAM2 except for that sectors not related to care and household services were aggregated to the ISIC Rev. 4 top level. • The resulting SAM is a 114 x 114 matrix. • An aggregation like this was needed for displays of sectoral detail in the following section.

  17. 4. A SAM-based description of care, gender, and economic structure in Korea • Drawing on SAM3 and data on time use with the same activity disaggregation, this section shows data on value added, time use, and wages, and households, focusing on care and gender aspects.

  18. Figure 4.1. Value-added shares by activity (GDP & non-GDP) (%)

  19. Figure 4.2. Aggregate time use by gender (%)

  20. Figure 4.3. Time use by activity and gender (%)

  21. Figures 4.4-4.5. Female and male time use by activity and education (%) [Each gender sums to 100% in each activity.]

  22. Figures 4.6-4.7. Female and male time use by GDP activity and regularity (%)[Each gender sums to 100% in each activity.]

  23. Figure 4.8. Average wage by activity (GDP work; e-wide average=100)

  24. Figure 4.9. Average wage by labor type (GDP work; e-wide average=100)

  25. Figure 4.10. Average wage by activity & gender (GDP work; average=100)

  26. Figure 4.11. Average wage by activity & education(GDP work; average = 100)

  27. Figure 12. Average wage by activity & regularity (GDP work; average = 100)

  28. Table 4.1. Household population & consumption data

  29. Table 4.2. Household population by household

  30. Figure 4.13. Household GDP income shares (%)

  31. Table 4.3. Household consumption shares (GDP and non-GDP) (%)

  32. 5. Next steps in the SAM work • The current version of the gendered Korea SAM includes the bulk of what is needed for the applied analysis except for the representation of policies. • However, apart from adjustments in response to comments in conjunction with this meeting, the SAM needs several changes to incorporate the government policies of 2014, including: • Disaggregation of child and elderly care into private and public • Government subsidies to the care sector making both private and public care services available to households at lower costs.

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