Education and Taiwan’s Changing Employment and Earnings Structure

Abstract

[Excerpt] Between 1980 and 1992, the enormous changes in economic development in Taiwan had significant impacts on the island's labour market. Examples of these changes include the island's almost legendary and meteoric economic growth, the maintenance of essentially full employment, an increase of around 116 per cent in real labour earnings, considerable upgrading of the educational qualifications of the labour force as a whole, a sustained and systematic shift in the composition of the labour force from agriculture into manufacturing and services and occupational upgrading (defined as the expansion of the share of the labour force in the better occupations, at the expense of the lesser occupations). The main purpose of this chapter is to provide in-depth analysis of these and other underlying changes in the Taiwanese labour market, with the main focal point being, on the one hand, the linkages between the employment and earnings structures, whilst on the other, the changes in the education and qualification levels and the new occupational structure of the island's labour force. Our econometric analysis is based upon a dataset taken from the Manpower Utilization Surveys (MUS) produced by the Directorate-General of Budget, Accounting and Statistics (DGBAS) in Taiwan, covering the years 1980 to 1992. The data for 1993 is not used in this chapter, despite being available to us, essentially because the occupation codes adopted after 1992 were incompatible with those of the earlier years.