Do anti-discrimination laws alleviate labour market duality?

Purpose This paper examines whether and how labour market duality can be alleviated through legislation that prohibits discrimination based on employment type. Design/methodology/approach In 2007, the Korean government undertook a labour reform banning discriminatory treatment against fixed-term, part-time and dispatched workers. By exploiting a gradual implementation of the anti-discrimination law by firm size targeting a subset of non-regular workers, the paper identifies the treatment effects of the anti-discrimination law, taking a difference-in-difference-in-differences approach. Findings The results suggest that the anti-discrimination law significantly increases hourly wages and the probabilities of being covered by national pension, health insurance, and employment insurance for targeted non-regular workers in small firms relative to other workers. Anticipatory behaviours of employers and selective transitions of employees in response to the implementation of the anti-discrimination law do not underlie the estimated effects. The presence of labour unions contributes to reducing gaps in labour conditions between regular workers and targeted non-regular workers. Originality/value The main contribution of this paper is to provide empirical evidence on causal impacts of equal pay legislation on the gaps in labour conditions between different categories of workers, using a difference-in-difference-in-differences estimation.