Chapter 1 Introduction

Chapter 2 Substitutability between Different Age Groups of the Workforce: A Theoretical Analysis and an Examination Using Aggregate Data

Chapter 3 The Effects of Youth Employment Policies: An Employment Substitutability Perspective

Chapter 4 Conclusion

The purpose of this study is to determine Korea’s employment substitutability between different workforce groups. The existing domestic and international discussions on this issue have mainly been about intergenerational employment substitution. In Korea, there has been a heated debate over the possibility of employment promotion policies for the elderly, such as the extension of retirement age, hindering youth employment. In major European countries, there has been much discussion about the negative effects of raising the pension age on youth employment. However, recent research findings show empirical evidence for employment substitutability between young people and middle-aged, and between the elderly and middle-aged, rather than between young people and the elderly. In this situation, we should refine the discussion about the possibility of employment substitution between young people and their age neighbors and look for empirical evidence. If such evidence is found, it may be necessary to significantly change the direction of the discussion on employment substitutability.

Chapter 2 offers a theoretical discussion on employment substitutability among workforce groups, and based on this, substitutability is estimated using aggregate data. The following section summarizes the information of Chapter 2. Despite the heterogeneity of the workforce, a certain level of substitutability generally exists according to the operating principle of the labor market. In Chapter 2, an empirical analysis was conducted on the possibility of substitution between different age groups, which inevitably arises from the practice of implementing job-related financial support policies mainly based on age. Under a typical competitive market, this study assumed a homogeneous production function of degree 1 (CRS), differentiated several age groups of the labor force using certain criteria, conceptualized them as input elements of the CES function, and attempted to estimate the substitutability between them. (For the full text of the English summary, please download the “Download 2 English_Abstract”.)