"Increase in Unmarried Population Reduces Labor Supply Not Only in the Future but Also Currently"

Bank of Korea Labor Supply Long-Term Trend Report

An analysis has emerged that the increase in the unmarried population not only lowers future labor supply due to declining birth rates but also reduces the current labor supply.

On the 8th, the Bank of Korea stated in its report titled 'Increase in Unmarried Population and Long-term Labor Supply Trends' that "Examining changes over the past decade, in South Korea, the decrease in male labor supply due to the rising proportion of unmarried population in the core age group outweighed the increase in female labor supply, resulting in a reduction of total labor supply in terms of both employment and working hours."

According to the report, the impact of the increase in the unmarried population on labor supply shows contrasting patterns by gender.

The rise in the proportion of unmarried population acts as a factor decreasing total labor supply for men, while it acts as a factor increasing it for women. The economic activity participation rate and employment rate (average from 2013 to 2023) for married men were 13 percentage points and 16 percentage points higher, respectively, than for unmarried men, with an unemployment rate about 4 percentage points lower. However, for married women, these rates were 19 percentage points and 16 percentage points lower, respectively, compared to unmarried women. Married men had a lower proportion of part-time work than unmarried men, resulting in longer working hours per person, whereas married women had shorter working hours.

Source=Bank of Korea

According to the report, these research findings were confirmed even after controlling for other factors affecting labor supply such as education level, breadwinner status, and age, showing that marital status statistically significantly affects labor supply for both men and women.

Source=Bank of Korea

Jeong Seon-young, head of the Employment Analysis Team at the Bank of Korea's Research Department, said, "The increase in the unmarried population due to declining marriage rates has a positive aspect of expanding women's participation in the labor market, but it also reduces men's labor supply and lowers birth rates, thereby limiting future labor supply capacity. Increasing the marriage rate is important not only for securing future labor supply but also for ensuring stable labor supply at the present time."

When the Bank of Korea comprehensively considered changes in birth rates reflected in future population projections along with changes in marriage rates to estimate long-term labor supply trends, it was predicted that if the unmarried proportion reaches about 60% for men and 50% for women in 30 years, South Korea's economic activity participation rate will peak at 79.7% in 2031 and then decline.

Jeong suggested that since the increase in the unmarried population is a structural trend, responses tailored to this are necessary. He said, "Both 'policies to mitigate population unmarriedization,' which lower the opportunity costs of marriage and childbirth to make them more preferred choices, and 'policies to adapt to population unmarriedization,' which improve labor market conditions to encourage active participation of the unmarried population in the labor market in line with demographic dynamics, are needed."

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