KWDI Korean Women’s Development Institute

Abstract

 

Analysis of Affirmative Action and Its Impact on Female Employment

 

Nanjue Kim

Jihyun Eunice Hong

Sunhaeng Lee

Hyebin Sim

Kyusoo Shin

 

The national agenda announced by President Moon Jae-in’s government in July 2017 included “expanding the scope of enterprises subject to affirmative action.” Affirmative action (hereinafter “AA”) is a system that went into effect on March 1, 2006 based on the Equal Employment Opportunity and Work-Family Balance Assistance Act for the purpose of improving female employment rates and eliminating discrimination in employment. As a part of the national agenda of “expanding the scope of enterprises subject to affirmative action,” affirmative action was applied to local public enterprises with 300 or more employees in 2018 and to all local public enterprises in 2019, resulting in all local public enterprises becoming subject to affirmative action from 2019. The government is planning to apply AA not only to local public enterprises but also to companies affiliated with large-sized companies so that private enterprises with 300 or more employees will be subject to affirmative action from 2022. The indices evaluating the performance of the AA system include the female employment rate and the percentage of female managers, and enterprises subject to AA are classified as pass or fail based on their female employment rates. Despite the enforcement of AA from 2006, South Korea continues to rank at the bottom in areas including the percentage of female managers and the percentage of female executives among OECD nations in the glass ceiling index announced annually by the Economist, a weekly newspaper based in the United Kingdom, since 2013.

 

Changes in the percentage of overall female employment rates and the percentage of female managers in enterprises subject to AA show that the rate and the percentage increased year-on-year until 2017 only to decrease year-on-year from 2018, which is the year when local public enterprises and public corporations were included in enterprises subject to AA. As of 2019, the percentage of female executives and female managers in public institutes with 1,000 or more employees and local public enterprises were lower than those of public institutes as well as those of private enterprises. In particular, local public enterprises with 1,000 or more employees and those with less than 1,000 employees both showed lower female employment rates, a lower percentage of female managers and a lower percentage of female executives compared to public corporations as well as private enterprises. The percentage of female managers and the percentage of female executives are lower in the public sector than the private sector, and the gap was widened further in 2018 when local public enterprises were included in the analysis.

 

Considering the female employment rate, the percentage of female managers, and the percentage of female executives showed slow progress for thirteen years from 2006 to 2019 while affirmative action was in place, this study aims to analyze the reasons and make policy suggestions by investigating affirmative action’s impact on female employment. This study used the database on public administration of affirmative action to analyze changes in female employment and female managers, to investigate how affirmative action influenced female employment and the status of female managers of enterprises subject to AA since 2013, and to recommend how the AA system should be improved. Regarding the widened public-private gap since the application of AA to local public enterprises in 2018, a focus group interview was conducted with public enterprises subject to AA for exploring policy measures that will help the successful settlement of the AA system.

 

Based on research results and changes in the government’s AA policy, this study makes policy suggestions in six areas: making the materials submitted by enterprises subject to AA public, expanding the scope of materials submitted by enterprises subject to AA, increasing the scope of enterprises subject to AA, improving the system for evaluating compliance with female employment, raising awareness of CEOs toward AA, and supporting enterprises for promoting and effectively applying AA and building infrastructure. First, in order to make public the materials submitted by enterprises subject to AA, this study suggests the disclosure of positions of male and female employees and the status of managers and the disclosure of the salary status of male and female employees.

 

Second, in order to expand the scope of materials submitted by enterprises subject to AA, this study suggests that enterprises should be obligated to disclose information about the proportion of male to female employees and to disclose information about the forms of employment of male and female employees.

 

Third, in order to expand the scope of enterprises subject to AA, this study suggests that in addition to local public enterprises, enterprises funded or invested in by local governments and large-sized private enterprises with 300 or more employees should also be subject to AA.

 

Fourth, in order to improve the system for evaluating compliance with female employment target rate, this study suggests measures including adjusting the scope of industries included in comparison, differential application of the baseline of business scale and industry according in calculating the female employment rate and the percentage of female managers, considering the enterprise type (public or private) when comparing 70% of the female employment compliance rate in addition to the industry type and the enterprise size, and setting the overall female employment rate (the rate of female managers) and differentially applying the target achievement date by industry.

 

Fifth, in order to raise the awareness of CEOs towards AA, this study suggests hosting a CEO AA forum for enterprises subject to AA and making AA training mandatory for public institutes subject to AA.

 

Last, in order to support enterprises for promoting and effectively applying AA and building infrastructure, this study suggests that public institutes and local public enterprises in industries traditionally underrepresented by women should be provided with support to hire more female executives, the knowhow of enterprises complying with AA female employment rate should be transferred and shared, and teams dedicated to supporting the AA program should be installed and provided with more staff.

 

Research areas: labor？employment

Keywords: Affirmative Action, Female manager, Female employment