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Title page

Contents

Abstract/Résumé 4

Trends in youth employment and comparison to other OECD countries 7

Government policies to improve life for youth 11

A race for educational credentials creates labour market mismatch 14

Labour market dualism is deeply entrenched 26

Product market dualism: the gap between SMEs and large firms 33

Recommendations to increase youth employment 39

References 40

Tables

Table 1. The new government's plan to help young people 13

Table 2. Employment rates vary widely by field of study 25

Table 3. The sources of job creation for young people 35

Figures

Figure 1. Korea's youth employment rate is below the OECD average 7

Figure 2. Employment trends in Korea during the past two decades 8

Figure 3. Youth employment rates in Korea were below the OECD average in 2021 9

Figure 4. The COVID-19 pandemic had a significant impact on youth employment 10

Figure 5. Employment rates by education level 14

Figure 6. Technological change is reducing the number of production jobs 15

Figure 7. The share of women (aged 25-29) with a university degree is higher than for men 15

Figure 8. Nearly three-quarters of high school graduates advance to tertiary education 16

Figure 9. The share of tertiary graduates among young Koreans is the highest in the OECD 17

Figure 10. Reduced hopes of upward social mobility 18

Figure 11. Career status after graduation from vocational high school 18

Figure 12. The share of NEETs in Korea is high 19

Figure 13. The share of NEETs among women in the 25-29 age group has fallen 20

Figure 14. Field-of-study mismatch in Korea is relatively high 20

Figure 15. Financial returns to tertiary education are relatively low 21

Figure 16. Life satisfaction of Korean adolescents is low 23

Figure 17. An international ranking of the skillset of graduates 24

Figure 18. The share of non-regular workers is high for young people 27

Figure 19. Tertiary education increases the chance of regular employment and higher wages 28

Figure 20. Wages and social insurance coverage are lower for non-regular workers 29

Figure 21. Spending on active labour market policies in Korea is relatively low (in 2019) 31

Figure 22. Korea's minimum wage and participation tax rates are very high 32

Figure 23. The productivity gap between SMEs and large firms in Korea is wide 34

Figure 24. Large firms pay a significant wage premium in Korea 34

Figure 25. Education increases the chance of working at large firms 35

Figure 26. Korea's attitudes toward entrepreneurship show scope for improvement 37

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