Factors Related to Wage Differentials between Core and Periphery Industries in Taiwan

This study mainly explored the wage differentials between core and periphery industries. Simultaneously, try to use human capital theory, compensating wage differentials theory, and dual labor market theory to verify the phenomenon. In addition, this study also made improvements on methods that estimate the wage differentials between core and periphery industry workers, especially on the ""endogenous switching model"" and the ""Oaxaca decomposition method"". The results from empirical study showed: (1) There’s architectural difference of the wage estimation between the core and periphery industry workers, and this indicates the dual labor market.(2) Workers with academic background of science major, professional jobs, higher income spouse, are more inclined to choose core industries.(3) For workers with higher occupational accident risks, seniority at current posts, and more prospective years of service, their wages and compensations are higher if they are core industry employees than they are not.(4) In this paper, all of the three theoretical framework can explain the phenomenon of wage differentials between core industry workers and periphery industry workers, and then the labor market dualism is the main reason to cause the low-wage service industries.