The Bank of Korea Says "Economic Support for Childbirth Must Increase to Expand Youth Labor Supply"

On July 5th, 2022, job seekers are looking at the recruitment and consultation reservation board at the 2022 Mid-sized Companies Job Fair held at COEX in Gangnam-gu, Seoul.
[Image source=Yonhap News]

The Bank of Korea emphasized that in order to increase labor supply among the youth, economic support for childbirth should be expanded, and an environment that can enhance economic productivity by expanding labor market participation among the elderly should be created.

On the 13th, the Bank of Korea explained this through the BOK Issue Note report titled "Analysis of Factors Expanding Labor Supply: Focusing on Youth and the Elderly," stating, "The expansion of labor supply in our country is being led by the youth and the elderly."

According to the Bank of Korea, from 2010 to 2015, the increase in the economic activity participation rate (EAPR) of the core working-age group (ages 30-59) led the overall rise in the economy's EAPR, but from 2015 to 2022, the increase in EAPR among the youth and elderly has been the main driver.

The causes for the increase in labor supply among the youth include the rising proportion of highly educated individuals, an increase in the proportion of unmarried women, and a rise in the number of young household heads.

The proportion of highly educated workers (those with a bachelor's degree or higher) actively supplying labor increased from 19.3% in 2015 to 22.1% in the first half of this year, and the unmarried rate among women aged 25-29 rose by 13.4 percentage points from 71.7% to 85.1% during the same period.

The Bank of Korea explained, "Recently, living expenses have increased sharply, including housing costs, and financial debt has also risen, making it difficult for young household heads to leave the labor market."

The factors expanding labor supply among the elderly were analyzed as insufficient living expenses, widening asset inequality, and an increase in public jobs.

The proportion of elderly people who wish to continue working regardless of age or employment status rose from 53.0% in 2015 to 62.6% last year, mainly due to financial reasons.

Additionally, the widening asset inequality among elderly households acted as a factor expanding labor supply among relatively impoverished groups.

The Bank of Korea explained that to ensure the medium- to long-term expansion of labor supply among the youth, economic support for childbirth should be increased and the criteria for mandatory installation of daycare centers should be changed to encourage young women to maintain employment after marriage and childbirth.

Currently, workplace daycare centers are mandatory if there are 300 or more regular female workers or 500 or more regular workers overall, but the proportion of businesses with 500 or more workers is only 0.05%, making this measure ineffective.

As the labor supply expansion among the elderly is also expected to continue due to increased life expectancy, the Bank of Korea pointed out that an environment should be created, such as the establishment of government-led Senior Talent Centers, to ensure that the expansion of labor supply among the elderly contributes to overall economic productivity improvement.

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