IDEAS home Printed from https://ideas.repec.org/p/zbw/kdifoc/88.html
   My bibliography  Save this paper

Why Korea's Youth Unemployment Rate Rises

Author

Listed:
  • Choi, Kyungsoo

Abstract

Korea's youth unemployment rate has rapidly ascended since 2013 while total unemployment remains little changed. The youth unemployment rate of high school graduates has been maintained at a stable level thanks to the growing number of service jobs. However, a rapidly rising number of college graduates are unemployed due to the slow creation of professional and semi-professional jobs. The government's youth employment support program has also contributed to the increase, but the extent is minor. To enhance the demand for skilled workers, economic innovation needs to accelerate and excellence in higher education must be achieved. - The youth (15-29) unemployment rate rapidly ascended from 2013. - The decline in the employment rate for men aged 25-29 stopped after 2009 while the unemployment rate has soared since 2013. - Youth employment is driven more by future careers than income. - The skill level of young Koreans is densely concentrated in the middle, which means that their skill level is high among the bottom but low among the top. - Advanced economies experienced a severe polarization of jobs in the 1980s, an increase in service jobs from the 1990s with the IT revolution, followed by a decrease in skilled jobs in recent years. - The impact from the demographic changes to the youth unemployment rate is insignificant as of now, but the population aged 25-29 is expected to rise by 390,000 in 2017-2021. - The Ministry of Employment and Labor's Employment Success Package Program partially increases the unemployment rate but with little significance. - With growing service jobs from 2010, the employment rate and the wages of high school graduates improved. - To increase service jobs, the gains from technological innovation must lead to a reduction in prices. But, this is only possible when regulations are eased and competition is encouraged. - The minimum wage system does not directly increase the wages of high school graduates, but it can serve as an institutional tool necessary for the protection of labor conditions. - The rising youth unemployment rate is driven by the increase in the unemployment rate of college graduates, particularly due to the decrease in semi-professional jobs. - Korea's innovation level must be enhanced to increase the number of skilled jobs. To that end, an environment must be created to motivate innovation, business growth dynamism and excellence in education.

Suggested Citation

  • Choi, Kyungsoo, 2017. "Why Korea's Youth Unemployment Rate Rises," KDI Focus 88, Korea Development Institute (KDI).
    • Handle: RePEc:zbw:kdifoc:88
    DOI: 10.22740/kdi.focus.e.2017.88
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/200889/1/kdi-focus-88.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22740/kdi.focus.e.2017.88?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Paul Beaudry & David A. Green & Benjamin M. Sand, 2016. "The Great Reversal in the Demand for Skill and Cognitive Tasks," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 199-247.
    2. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 705-746.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Choi, Kyungsoo, 2018. "Employment Effect of Minimum Wage Increase," KDI Focus 90, Korea Development Institute (KDI).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Henry S Farber & Daniel Herbst & Ilyana Kuziemko & Suresh Naidu, 2021. "Unions and Inequality over the Twentieth Century: New Evidence from Survey Data," The Quarterly Journal of Economics, Oxford University Press, vol. 136(3), pages 1325-1385.
    2. David A. Green & Benjamin M. Sand, 2015. "Has the Canadian labour market polarized?," Canadian Journal of Economics, Canadian Economics Association, vol. 48(2), pages 612-646, May.
    3. Christian Belzil & Jörgen Hansen, 2020. "The evolution of the US family income–schooling relationship and educational selectivity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 35(7), pages 841-859, November.
    4. Gallipoli, Giovanni & Makridis, Christos A., 2018. "Structural transformation and the rise of information technology," Journal of Monetary Economics, Elsevier, vol. 97(C), pages 91-110.
    5. Morin, Louis-Philippe, 2015. "Cohort size and youth earnings: Evidence from a quasi-experiment," Labour Economics, Elsevier, vol. 32(C), pages 99-111.
    6. Wenchao Jin, 2022. "Occupational polarisation and endogenous task-biased technical change," Working Paper Series 0622, Department of Economics, University of Sussex Business School.
    7. Richard Blundell & David A. Green & Wenchao (Michelle) Jin, 2016. "The UK wage premium puzzle: how did a large increase in university graduates leave the education premium unchanged?," IFS Working Papers W16/01, Institute for Fiscal Studies.
    8. Audra Bowlus & Lance Lochner & Chris Robinson & Eda Suleymanoglu, 2021. "Wages, Skills, and Skill-Biased Technical Change: The Canonical Model Revisited," CESifo Working Paper Series 9212, CESifo.
    9. Aránzazu Guillán Montero & David Le Blanc, 2019. "Lessons for Today from Past Periods of Rapid Technological Change," Working Papers 158, United Nations, Department of Economics and Social Affairs.
    10. Lindley, Joanne & Machin, Stephen, 2014. "Spatial changes in labour market inequality," Journal of Urban Economics, Elsevier, vol. 79(C), pages 121-138.
    11. Andrea Salvatori, 2018. "The anatomy of job polarisation in the UK," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 52(1), pages 1-15, December.
    12. Joanne Lindley & Stephen Machin, 2016. "The Rising Postgraduate Wage Premium," Economica, London School of Economics and Political Science, vol. 83(330), pages 281-306, April.
    13. Anna Sabadash, 2013. "ICT-induced Technological Progress and Employment: A Literature Review," JRC Working Papers on Digital Economy 2013-07, Joint Research Centre.
    14. Anna Sabadash, 2013. "ICT-induced Technological Progress and Employment: a Happy Marriage or a Dangerous Liaison? A Literature Review," JRC Research Reports JRC76143, Joint Research Centre.
    15. Aubry, Amandine & Héricourt, Jérôme & Marchal, Léa & Nedoncelle, Clément, 2022. "Does Immigration AffectWages? A Meta-Analysis," CEPREMAP Working Papers (Docweb) 2202, CEPREMAP.
    16. Ottaviano, Gianmarco & Peri, Giovanni, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," CEPR Discussion Papers 6916, C.E.P.R. Discussion Papers.
    17. F. Cerina & A. Moro & M. Rendall, 2020. "A Note on Employment and Wage Polarization in the U.S," Working Paper CRENoS 202002, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    18. Alfred Garloff & Carsten Pohl & Norbert Schanne, 2013. "Do small labor market entry cohorts reduce unemployment?," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 29(15), pages 379-406.
    19. Gordon Hanson & Chen Liu & Craig McIntosh, 2017. "The Rise and Fall of U.S. Low-Skilled Immigration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(1 (Spring), pages 83-168.
    20. Battisti, Michele & Gatto, Massimo Del & Parmeter, Christopher F., 2022. "Skill-biased technical change and labor market inefficiency," Journal of Economic Dynamics and Control, Elsevier, vol. 139(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:kdifoc:88. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/kdiiikr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.