A gender analysis of the vertical wage gap and employee turnover of public organizations in South Korea
Junsung Kim, Jukyoung LeePurpose
This study investigates the relationship between the vertical wage gap (disparities between executives and other employees’ salaries) and actual turnover rates in public organizations, with a specific focus on how these effects differ by gender.
Design/methodology/approach
Grounded in equity theory and the glass ceiling concept, the research utilizes panel data (2017-2022) from 303 public organizations in South Korea. A random effects model examines the impact of the internal wage gap on gender-disaggregated turnover rates.
Findings
The results reveal a significant gendered relationship: a wider vertical wage gap increases female turnover rates but shows no statistically significant effect on male turnover. This suggests women perceive such gaps as signals of structural inequality and limited career advancement akin to a glass ceiling, prompting exit. In contrast, men may interpret the same gap as “a temporary loss” compensable by future promotion prospects.
Originality/value
This study contributes by analyzing actual turnover rates (rather than intention) in the unique context of South Korea’s high-job-security public sector, isolating the role of internal organizational equity. It provides robust evidence that vertical pay disparity is a key driver of female turnover, underscoring the urgent need for transparent wage structures and gender-neutral promotion systems to improve retention.