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The Future of Contractual Mandatory Retirement in South Korea

Author

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  • Klassen, Thomas R.

Abstract

Although contractual mandatory retirement at a specified age has been eliminated, or limited, in many Western nations, the practice remains widespread in other parts of the world. In South Korea (henceforth, Korea) most workers are subject to contractual mandatory retirement, often while still relatively young; that is, in the 50s. Korean retirement policies are deeply rooted in the belief by policy makers, employers and unions that mandatory retirement creates jobs for young workers. In addition, because worker compensation is linked to age, employers argue that the seniority-based wages paid to older workers are excessive. Notwithstanding the opposition to reforming retirement policies, Korea faces a rapidly aging population that will require modifications to existing retirement arrangements. Moreover, greater emphasis on human rights, and efforts to reduce age-based discrimination in employment, will add to the pressures to increase the age of contractual mandatory retirement.

Suggested Citation

  • Klassen, Thomas R., 2012. "The Future of Contractual Mandatory Retirement in South Korea," CLSSRN working papers clsrn_admin-2012-6, Vancouver School of Economics, revised 19 Feb 2012.
    • Handle: RePEc:ubc:clssrn:clsrn_admin-2012-6
    as

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    File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%2093%20-%20Klassen.pdf
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    References listed on IDEAS

    as
    1. Joonmo Cho & Sunwoong Kim, 2005. "On using mandatory retirement to reduce workforce in korea," International Economic Journal, Taylor & Francis Journals, vol. 19(2), pages 283-303.
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    More about this item

    Keywords

    Mandatory Retirement; South Korea; Age Discrimination; Population Aging;
    All these keywords.

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)

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