[Population Measures] Increasing Economic Participation of Women, Youth, Elderly, and Foreigners, Enhancing Job Training to Boost Productivity

Measures to Address Changes in Population Structure

Summary of Discussions from the 2nd Population Policy TF
Mitigating the Impact of Population Decline and Responding to Structural Changes Due to Aging

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki is delivering opening remarks while presiding over the "15th Emergency Economic Central Countermeasures Headquarters Meeting" held at the Government Seoul Office in Gwanghwamun, Seoul on the 27th.

[Sejong=Asia Economy Reporter Ju Sang-don] The government has decided to increase economic activity participation rates across sectors such as women, youth, the elderly, and foreigners in response to population decline, and to improve the quality of lifelong education and vocational training to enhance individual productivity.

On the 27th, the government held the 'Emergency Economic Central Countermeasures Headquarters Meeting' chaired by Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki, where it announced the 'Response Directions to Population Structure Changes' containing these measures.

This response plan is the result of the activities of the 2nd Population Policy Task Force (TF). The 2nd TF was formed in January this year after the conclusion of the 1st TF and held six plenary meetings and over 30 sectoral working group meetings.

First, the government plans to mitigate the impact of population decline by quantitatively expanding economic participation and qualitatively enhancing productivity. The expansion of economic participation will be pursued sector by sector, including women, youth, the elderly, and foreigners. Despite high educational attainment, women face career interruptions due to difficulties balancing work and family life and workplace gender gaps. This ultimately leads to avoidance of childbirth and underutilization of human capital, which the government aims to actively address.

To prevent career interruptions among working women by sharing childcare burdens, the government will increase the number of times parental leave can be split from the current once and allow parental leave to be taken during pregnancy. Additionally, the government plans to train an additional 34,000 childcare workers this year through its childcare support program. To reduce the burden on companies due to parental leave, the sunset clause on corporate tax credits granted during parental leave will be extended, and starting next year, companies using parental leave or reduced working hours will receive initial support payments (100,000 KRW per month) for the first to third times. Maternity and postnatal benefits will also be provided to artists and special employment workers (SEWs). Benefits for artists will begin in December this year, and legal amendments for SEWs are being pursued. Support for the substitute workforce market for parental leave will be expanded through increased support for the substitute workforce bank.

Efforts will also be made to alleviate household and caregiving burdens. The government plans to enact the 'Domestic Worker Act' within this year (government proposal to be submitted in July) to formalize the domestic service market, thereby encouraging an increase in service personnel supply and quality improvement. Next year, a survey will be conducted to assess the supply and demand status of the domestic and caregiving labor market, and plans to address shortages by utilizing idle labor and foreign workers will be considered. To support reemployment and entrepreneurship of women with career interruptions, employment support services for specialized female professionals scattered across ministries will be linked and supported, and the K-Startup Women’s League will be established along with the creation of a 100 billion KRW Women’s Venture Fund by 2022.

For the youth, support will focus on strengthening employment assistance and promoting participation in social activities and career exploration. To expand field training opportunities for vocational high school students, a phased package support system for participating companies will be established, and new programs in emerging industries such as artificial intelligence (AI) will be introduced at national technical high schools. Collaborative programs between leading universities and core companies (including student lectures, faculty training, and field training) will also be operated.

Measures to create conditions for activating elderly employment will also be pursued. A new elderly-tailored job model (tentative name) that reduces the employment burden on companies will be introduced by 2022, and the elderly population currently grouped as '65 and over' in economic activity surveys will be subdivided into '65-69' and '70 and over' categories, with nationwide employment numbers and rates published accordingly. Additionally, institutional activation plans for the full operation of the elderly continued employment incentive will be prepared in the second half of this year.

Furthermore, to attract outstanding foreign talent, the government will expand the 'Multiple Nationality System for Outstanding Talent' in the second half of this year. The target fields will increase from the existing four?science, humanities and academia, culture, arts and sports, management and trade, and advanced technology?to ten by adding distinguished individuals, corporate employees, and holders of core technologies and intellectual property rights. Visa benefits for the inflow and settlement of scientific and technological talent will also be strengthened. For short-term stayers, the scope of permitted institutions and activity periods for lectures and presentations will be expanded, and for long-term stayers, mutual activities and family employment between professor visas (E-1) and research visas (E-3) will be allowed.

To enhance labor productivity, the government will first strengthen the linkage between lifelong education (Ministry of Education) and vocational training (Ministry of Employment and Labor) and establish strategies to improve service quality by institution. Based on industrial job analysis, joint education programs between universities and companies will be developed, and company-customized cooperative classes (starting in 2020) and competency completion systems (modularized curricula) will be promoted. Additionally, efforts will be made to gradually build a government-wide integrated platform that allows learners to systematically manage their learning history, credit acquisition, and qualification recognition. Starting next year, plans will be made to link the 'Tomorrow Learning Card' and lifelong education vouchers centered on learners, and discussions will be held to promote lifelong learning leave and expand the right to request reduced working hours to establish a foundation for nationwide skill development.

Deputy Prime Minister Hong said, "Changes in population structure are structural risk factors that have profound effects on the economy and society, such as lowering potential growth rates and increasing dependency burdens. A nationwide all-out response is no longer a choice but a matter of necessity and survival." He added, "Separately from this response plan, the 4th Basic Plan for Low Fertility and Aging Society (2021-2025), which includes measures to overcome ultra-low fertility, will be announced within this year, centered on the Low Fertility and Aging Society Committee."

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