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Development Overview

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Overview of Korea’s development experience

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Development Overview
Social Development Employment

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Employment

Non-standard workers and self-employment

The Korean labor market is distinguished from those in other OECD countries by the prevalence of non-standard workers (temporary employees or day laborers) and self-employment (Figure 6-24).

Figure 6-24. International comparison of the employment pattern


First, a large number of workers work as temporary employees or day laborers with a short duration and low job security. In 2009, 43 percent of salaried workers were either temporary employees or day laborers.

The incidence of non-standard work is particularly high among women, older workers and the less-educated, whereas younger and highly-educated male workers mainly enjoy regular jobs. In 2006, the share of non-standard workers was 20 percent in large firms with 300 and more employees and about 50 percent in small firms with less than 5 employees.

As a result, two-thirds of non-standard workers were employed in small firms with less than 30 employees. Non-standard workers employed in large firms with more than 300 employees were only 7 percent.

The share of non-standard workers among salaried workers started to rise in 1994 but reversed course in 2001 (Figure 6-21). Their absolute number stayed at 7.2-7.3 million since 2002, but the healthy increase of regular employees caused their share to fall (Figure 6-25). The dynamics behind such changes is not well understood. The study by Yong-Seong Kim (2009) suggests that some non-standard workers do move upward by finding regular jobs, but many others exit the labor market to be replaced by new entrants who haver regular job.

Figure 6-25. Workers by status



Figure 6-26. Share of the non-salaried workers


Second, the self-employed accounted for 24 percent of all employment in 2009. Their share, however, had been falling since the 1960s (Figure 6-26). The trend stopped in the 1990s but resumed in the 2000s. More dramatic has been the decline in the number and share of unpaid family workers. Again, it is not clear how these changes are related to the increase of regular employees. In any case, the transition toward regular employment looks desirable as it will lead to increased job stability, a smaller underground economy, and greater coverage of social insurance programs.

Source : SaKong, Il and Koh, Youngsun, 2010. The Korean Economy Six Decades of Growth and Development. Seoul: Korea Development Institute.

References

· Kim, Yong-Seong“, A Study on the Mobility of Non-regular Workers,”in Gyeongjoon Yoo (ed.), Studies on Non-regular Workers, Research Monograph 2009-03, Korea Development Institute, 2009, pp.185-220 (in Korean).