Labor Market & Employment Policies

* This paper was originally published in Korean in the 36th issue of the Monthly Labor Review published by the Korea Labor Institute in December 2007.

* Hye-won Kim (Research Fellow, Korea Labor Institute, hwkim@kli.re.kr)


Koreas unemployment rate is lower than other OECD countries and it has been the subject of much analysis. But there has been little research that breaks down unemployment by gender, educational level or age group, to identify the gap or characteristic structure, if any. Comparing unemployment by age group in particular will be helpful in enhancing objectivity and depth in our understanding of the Korean labor market.
This study uses three age groups: youth group aged 15~24, adult group at 25~49, and mid/old-aged group at 50~64. There are also three educational levels: middle school graduate or lower, high school graduate, and university graduate or higher. Incidentally, Cohen et al. (1997) uses four educational levels, with the lowest level being high school drop-out or lower, mid-level is high school graduate, high level is college drop-out or lower, and the highest is university graduate or higher. Saint-Paul (2000) uses three levels, combining the mid- and high level. This study takes after the latter, including college graduates under "high school graduates."
The labor force composition shows a declining proportion of the youth group, most likely as a result of low fertility and population ageing. This decline is partly owed to rising educational level. Korea has a higher proportion of highly educated than other countries. As seen in and , the university graduates, at 24% as of 2006, was similar to the US 23%. Particularly among the adult group, 25~49, the percentage nears 30%, higher than the US 28%. But the number drops considerably in the mid/old-aged group to 12%, much lower than the US 22%. In the US, higher education became the norm quite some time ago, which led to the relative evenness in university graduates between the adult group and the mature age group, but in Korea the trend took place only after the 1980s, which is why university graduates among the mature age group is only about 1/3 of the adult groups.
Looking at the male employment rate by age and education, reveals structural changes (according to education) that transpired in the past 20 years. In 1986 and 1996, among the core labor force, the adult group, unemployment rate was higher when education was higher. But in 2006 unemployment was highest among the lower educated, middle school graduate or lower, while it goes down as education becomes higher.

---