"Employment Rate of College Graduates at 75.2%... Ranked 31st Among 37 OECD Countries"

Hankyung Research Institute Analyzes Youth Higher Education Completion Rates and Employment Indicators in OECD Countries

Data provided by Korea Economic Research Institute

[Asia Economy Reporter Kim Heung-soon] An analysis has revealed that the proportion of employed young college graduates in South Korea ranks among the lowest among OECD member countries.

The Korea Economic Research Institute (KERI) under the Federation of Korean Industries announced on the 18th that, after analyzing the higher education attainment rates and employment indicators of youth (ages 25?34) in OECD countries, South Korea’s employment rate for young college graduates was 75.2%, ranking 31st out of 37 OECD countries.

KERI pointed out that the low employment rate of young college graduates in South Korea is due to a high proportion of economically inactive population not participating in economic activities. The rate of economically inactive young college graduates in South Korea was 20.3%, the third highest among 37 OECD countries. As of 2020, among the economically inactive young college graduates, about 3 out of 10 were job seekers preparing for employment, and 2 out of 10 were simply resting.

Mismatch Between Major and Occupation Among Young College Graduates at 50%
Ranked 1st Among 22 OECD Countries

KERI identified the mismatch between majors and jobs as one of the reasons for delayed employment among young college graduates. South Korea’s mismatch rate between major and occupation was 50.0%, ranking first among 22 OECD countries. According to a 2021 Statistics Korea survey, the mismatch rate between jobs and majors was 52.3%, indicating that more than half of employed individuals work in jobs unrelated to their majors.

KERI attributed the severe mismatch to university enrollment restrictions. As evidence, they cited that the enrollment capacity of Stanford University’s Computer Science Department increased more than fivefold from 141 in 2008 to 745 in 2020, whereas Seoul National University’s increased only from 55 to 70 during the same period. They argued that "relaxing university enrollment restrictions is necessary to ensure timely supply of manpower needed by industries."

Data provided by Korea Economic Research Institute

College Graduates Increase by 3.0% Annually... But High-Skilled Jobs Grow Only 1.3%

Another cause identified was the labor market supply-demand imbalance, where the growth rate of jobs requiring high qualifications does not keep pace with the increase in college graduates. South Korea’s youth education attainment rate was 69.8%, the highest among 37 OECD countries, but the number of high-skilled jobs was insufficient in comparison. From 2013 to 2020, for which time-series comparisons are available, the number of college graduates increased by an average of 3.0% annually, whereas high-skilled jobs increased by only 1.3%.

Additionally, due to the advancement of production systems, the employment inducement coefficient across all industries decreased from 13.8 in 2010 to 10.1 in 2019, and the employment inducement coefficient in manufacturing?classified as so-called quality jobs?declined from 7.86 in 2010 to 6.25 in 2019. Furthermore, among South Korea’s major industries, 346,000 jobs in eight sectors suitable for young college graduates are at risk of being lost.

KERI argued, "To respond to this job loss crisis, it is necessary to swiftly transition businesses to advanced industries suited for the Fourth Industrial Revolution era and create many jobs that young college graduates want to pursue through support for research and development."

Economic Freedom in Labor Regulation Ranked 149th Out of 165 Countries

KERI also claimed that South Korea’s rigid labor market structure hinders new hiring of young people. The World Economic Forum (WEF) labor market competitiveness ranking placed South Korea 97th out of 141 countries, and the Fraser Institute’s economic freedom ranking related to labor market regulation ranked South Korea 149th out of 165 countries, placing it near the bottom.

Choo Kwang-ho, Director of Economic Policy at KERI, emphasized, "Human resources are being inefficiently allocated compared to the education level of young people in South Korea. While working to resolve the mismatch between majors and occupations through relaxing university enrollment restrictions and strengthening university education competitiveness, it is also necessary to improve labor market flexibility to remove employment entry barriers for young people."

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