ABSTRACT
At the end of 1997, Korea was hit by a massive financial crisis on its path toward transformation into a more globalized economy. The Korean economy then found itself facing a variety of tasks to overcome the urgent situation, and to restructure the economic system in the manner required by “global standards”. As part of the International Monetary Fund (IMF)-sponsored rescue program, the Korean government implemented radical economic restructuring measures by pursuing a high interest-rate policy and by allowing for “flexible” employment practices in the labour market. These policies resulted in a severe economic recession, which was accompanied by large-scale bankruptcies among firms, together with massive job displacements.
