KDI "One More Extension of Retirement Age Reduces Youth Employment by 0.2"

[Asia Economy Reporter Kwangho Lee] A study has found that when the number of beneficiaries of retirement age extension increases by one in a company, youth employment decreases by 0.2 persons.

The Korea Development Institute (KDI), a government-funded research institute, announced on the 14th in its report titled "The Effects of Retirement Age Extension on Employment of Older and Younger Workers" that for every one additional worker benefiting from retirement age extension, employment of older workers (aged 55-60) increases by 0.6 persons, while youth employment (aged 15-29) decreases by 0.2 persons.

This effect was more pronounced in larger companies and those with a lower existing retirement age. When the number of beneficiaries of retirement age extension increased by one, employment of older workers increased by 0.38 persons in companies with 10-99 employees. In companies with 100-499 employees, it increased by 0.5 persons, and in companies with 500-999 employees, it increased by 0.63 persons. Overall, it increased by 0.58 persons.

When the number of beneficiaries of retirement age extension increased by one, youth employment showed no change in companies with 10-99 employees, decreased by 1.9 persons in companies with 100-499 employees, and decreased by 2.6 persons in companies with 500-999 employees. Overall, youth employment decreased by 0.22 persons.

Researcher Yosep Han of KDI pointed out, "In small and medium-sized enterprises, early retirement or encouraged resignation is frequently implemented, and most non-regular workers are unrelated to the institutional retirement age extension."

Meanwhile, public institutions that are required to employ a certain scale of youth under the Special Act on the Promotion of Youth Employment showed simultaneous increases in employment of both older and younger workers despite retirement age extension.

For every one additional beneficiary of retirement age extension, employment of older workers increased by 0.53 persons, and youth employment increased by 1.2 persons.

One researcher explained, "The most direct cause is understood to be that public institutions were forced to hire new employees using the funds saved by implementing the wage peak system."

This content was produced with the assistance of AI translation services.