Care First, Then Education? Anticipated Han Eun Structural Reform Report [BOK Focus]

The Bank of Korea is unveiling the exterior of its newly constructed integrated annex, completed after six years, in Jung-gu, Seoul, on the morning of the 27th. Photo by Joint Press Corps

Recently, attention is focused on the next moves of the Bank of Korea, which has been making headlines for its "noisy research." After causing social waves last year with analyses on low birth rates, a critical report on the concentration in the Seoul metropolitan area, and research on foreign caregivers this month, the Bank of Korea plans to release research results in the second quarter that question the current domestic education system.

According to the Bank of Korea on the 8th, the Micro-Institutional Research Office of the Bank's Economic Research Institute has been conducting research on education reform since early this year at the request of Governor Lee Chang-yong. The goal is to announce the findings in the second quarter, with a focus on university entrance exams. However, rather than simply proposing superficial changes to the admissions system, such as expanding the College Scholastic Ability Test (CSAT) or increasing early admissions?topics that have been debated for years in the education sector?the research aims to raise issues with the current education system itself from the perspective of talent development. There are also plans to unofficially seek advice from related government ministries. Given the upcoming general elections, the announcement is expected around May, after the elections have concluded.

The Bank of Korea also plans to release new reports in the second half of the year aimed at issue raising, and there is considerable internal and external interest given the likelihood that these will address socially sensitive topics. The report titled "Measures to Alleviate Labor Shortages and Cost Burdens in Care Services," released by the Bank's Research Department on the 5th, was internally anticipated to provoke backlash from labor groups over its content on differentiated minimum wage application. As expected, the reaction was significant. Following the report's release, Is Jasmine, a member of the Green Justice Party, demanded an apology from Governor Lee, calling the report "inhumane and anachronistic," and the two major labor unions issued critical statements, triggering a backlash.

Going forward, the Bank of Korea appears likely to continue presenting "stone-throwing" opinions in its reports, even at the risk of negative external reactions. Governor Lee also attended a labor market seminar jointly hosted by the Bank of Korea and the Korea Development Institute (KDI) on the 5th, where he stated, "It is difficult to reach consensus among all stakeholders during structural reforms," and emphasized that "structural reforms accompanied by difficulties are necessary." When concerns were raised at the seminar about the side effects of introducing low-wage foreign care workers, Governor Lee raised his hand mid-seminar to express his frustration, saying, "We must be careful not to emphasize side effects to the point where the conclusion inevitably becomes 'public assistance is necessary' or 'the government should increase support and subsidies.'"

However, there are views that the central bank's unprecedented "broad-spectrum approach" is excessive, and Governor Lee is aware of this. An economics professor who requested anonymity said, "The Bank of Korea's primary functions are price stability and financial stability, and the Economic Research Institute used to conduct various studies to support these functions. But recently, it seems they are putting more effort into addressing a variety of issues," adding, "Inflation is not yet fully stabilized, and household debt problems remain unresolved. Trying to conduct extensive research with limited personnel will surely cause internal resistance."

In response, the Bank of Korea is working to secure research personnel, tripling the recruitment of doctoral-level staff in the first half of the year compared to the previous year, but the situation remains challenging. An economics community official explained, "The Bank of Korea still has a culture centered on open competitive recruitment, so doctoral-level personnel hired as experienced professionals often feel sidelined," adding, "Despite the geographical advantage of being centered in Seoul, this is why it competes with government-funded research institutes located in Sejong City."

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