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Yunjin Jung, Saerim Kim, Tobin Im. (2018) Risk Aversion and Sorting into the Public Sector: Evidence from South Korea KOREAN JOURNAL OF PUBLIC ADMINISTRATION/ Vol.56 No.1. 183-211
Young job seekers in South Korea who witnessed the financial crisis in the late 1990s, the
so-called International Monetary Fund (IMF) Crisis, have naturally recognized job security as an important factor in job choice. Consequently, they have favored public sector jobs as these jobs tend to come with greater security. Furthermore, previous research has mainly focused on socioeconomic factors, like the IMF Crisis, influencing the preference for high job security among job seekers rather than on in-depth study of the internal individual characteristics, such as risk preference. This study uses a logistic regression model to examine the relationship between personal risk perception and public-sector job choice using Korean Education & Employment Panel (KEEP) data from 2011 and 2014. The empirical results show that job seekers who have a high-risk preference appeared to choose the public sector as their career choice. This result reflects the special circumstances of the domestic civil service examination, which requires a large opportunity cost. This study mitigates endogeneities and provides a clear causal relationship by analyzing different survey points between the time of examining the individual's risk propensity as an explanatory variable and the actual employment as a dependent variable.

【Keywords:Public Sector Job Choice, Individual Risk Propensity, Job Security, Public Sector Competitiveness】
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