Since the 1997 financial crisis, the Korean labor market has been grappling with a rising youth unemployment rate. In the past, the government attempted to address this serious issue by implementing large-scale, comprehensive measures to mitigate youth unemployment. However, the future of youth employment is becoming increasingly bleak due to the recent circumstances in the job market, making it necessary for the government to enact prompt and effective policy measures.
This report aims to analyze the current status and causes of youth unemployment and provide an effective policy direction to address the issue. Many previous studies sought to attribute youth unemployment to over-education and the growing preference for stable jobs and expose the harsh realities in the labor market from the viewpoint of labor supply, as well as explain the reorganization of industries, preference for experienced workers, and changes in the employment patterns of businesses from the viewpoint of labor demand. Such efforts to explain the cause of youth unemployment in the context of labor supply and demand were limited, highlighting the need for more research on job-skills mismatches. However, finding sufficient empirical evidence proved challenging, and it has become increasingly necessary to take an economic approach to the issue of job mismatches. Therefore, this report aims to explain and outline the policy implications of the results of an empirical analysis of youth unemployment from the standpoint of the “mismatch” theory of unemployment.
To summarize the results of this report, a high frequency of job offers increases the elasticity of job matching, whereas a high implicit cost brings it down. In other words, a worker’s chance of securing a matching job is determined by the number of job offers received and by how small the implicit cost is with regard to the worker securing a job. This implies that policies which aim to improve the employment conditions for youth need to focus more on labor demand than on labor supply. Attempts to reduce youth unemployment have therefore fallen short. Future policies to induce youth employment need to involve active job-seeking efforts, private-sector-led workplace learning programs, comprehensive plans for and organized management of unemployed youths, and more intensive promotional activities.
청년실업의 원인과 정책적 대응방안(Analysis on youth unemployment and policy implication)
|Series Title; No||정책연구시리즈|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Social Development < Employment|
|Holding||KDI; KDI School|