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The Labour Market in Korea: Enhancing Flexibility and Raising Participation

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  • Randall S. Jones
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    Abstract

    This paper analyses the increasing dualism in the Korean labour market and the need to encourage greater labour force participation. Although the rising proportion of non-regular workers lowers labour costs and increases employment flexibility, it has a negative impact on both equity and efficiency over the long term. Relaxing employment protection for regular workers and increasing the coverage of the social safety net for non-regular workers would help limit the extent of dualism. Population ageing is projected to be exceptionally rapid in Korea, leading to a significant decline in the workforce by mid-century. Steps to boost the participation of women through family-friendly policies are a priority. It is also important to encourage employees to stay at firms beyond the age of 50. Making the wage system more dependent on productivity and less on seniority and implementing a company pension system in place of the retirement allowance would help maintain the employment of older persons. This Working Paper relates to the 2005 OECD Economic Survey of Korea (www.oecd.org/eco/surveys/korea). Le marché du travail en Corée : Accroître la flexibilité et les taux d'activité On examinera dans ce papier le marché du travail coréen sous l’angle de son dualisme de plus en plus marqué et de l’augmentation nécessaire des taux d’activité. La proportion croissante de travailleurs non réguliers réduit les coûts de main-d’oeuvre et favorise la flexibilité de l’emploi, mais elle a un impact négatif à long terme sur le plan de l’équité et de l’efficience. On atténuerait le dualisme en assouplissant la protection de l’emploi des travailleurs réguliers et en élargissant la couverture sociale des travailleurs non réguliers. Le vieillissement de la population devant être extrêmement rapide en Corée, la population active diminuera très sensiblement jusqu’au milieu de ce siècle. Il est impérieux d’augmenter le taux d’activité des femmes grâce à des mesures favorables aux familles. Il importe également d’encourager la poursuite de l’activité des salariés au-delà de 50 ans. En faisant en sorte que le système salarial fasse davantage intervenir la productivité au lieu de l’ancienneté et en remplaçant l’indemnité de retraite par un régime de retraite au niveau de l’entreprise, on faciliterait la prolongation de l’activité des personnes âgées. Ce Document de travail se rapporte à l'Étude économique de l'OCDE de la Corée, 2005 (www.oecd.org/eco/etudes/coree).

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    File URL: http://dx.doi.org/10.1787/548701741108
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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 469.

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    Date of creation: 16 Dec 2005
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    Handle: RePEc:oec:ecoaaa:469-en

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    Keywords: Korea; labour markets; old workers; unemployment insurance; labour force participation rates; dualism; female employment; wage subsidies; employment protection; non-regular workers; industrial relations; corporate pensions; Tripartite Commission; régime de retraite au niveau de l'entreprise; Commission tripartite; taux d'activité; marché du travail; subventions salariales; travailleurs âgés; assurance chômage; emploi des femmes; dualisme; protection de l'emploi; travailleurs non réguliers; relation du travail; Corée;

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