The Effect of Human Capital on the Economic Adjustment of North Korean Defectors: Focused on the Gender Differentiated Effect

As of June 2018, 31,550 North Korean defectors (NKDs) are living in South Korea (SK). Before defecting to SK, while in Norther Korea (NK) or neighboring countries, NKDs experienced extreme poverty and human rights abuses, resulting in a lack of human capital, frequently identified as a poverty-influencing factor. Indeed, most NKDs remain in poverty and stay in welfare programs even after exiting from the settlement support programs. Moreover, gender is a crucial factor in evaluating NKD settlement support programs as 56% of the NKD population are women in their 20s to 40s.

This study assesses how human capital increases the economic adjustment of NKDs in SK and further evaluates whether the effect varies by gender. Economic adjustment is captured by employment and welfare dependency levels. Human capital is measured by education levels, work experiences in NK and SK, and employment support from the SK government, captured by job training program participation, license acquisition support, higher education support, job search counseling, and participation in job fairs and job-related programs. A sample of 152 individual NKDs from the 2017 National Survey on NKDs was analyzed using Ordinary Least Square (OLS) analysis. Specifically, in the first step of the analysis (Model 1), independent, moderating, and control variables were entered into the model; in the second step (Model 2), the interaction variables of the independent and moderating variables were added.

Regarding the effect of human capital on employment, Model 1 suggests that employment levels of NKDs are increased by previous job experiences in SK (+0.881, p<0.001), and that employment levels of NKD women are lower than NKD men (-0.355, p<0.05). Model 2 shows that employment levels are increased by college education in NK (+0.437, p<0.1) and previous job experiences in SK (+0.828, p<0.05). There was a gender-differentiated effect on the relationship between employment levels and participation in job fairs or job-related programs (+1.647 more for female, p<0.05).

Regarding the effect of human capital on welfare dependency levels, Model 1 suggests that the welfare dependency level of NKDs is decreased by college education in SK (-0.462, p<0.1) and previous job experiences in SK (-0.869, p<0.001). Model 2 shows that welfare dependency levels of NKDs are decreased by previous job experiences in SK (-0.653, p<0.1). There was a gender-differentiated effect on the relationship between welfare dependency levels and participation in job fairs or job-related programs (-1.421 point for female, p<0.1).

That is, employment support programs related to job preparation did not affect the economic adjustment level statistically significantly. This finding suggests that the settlement support program needs to help NKDs to enter a job market as soon as possible and acquire necessary skills in the field rather than in the job preparation programs of settlement support programs. Also, it suggests that there are gender differences related to employment, and employment support programs, except for job fairs or job-related programs, were ineffective to decrease the gender gap. SK's settlement support policy should focus more on the needs of NKD women to reduce this gender gap in employment.