Investing in Youth Seoul, 29 October 2019 http://oe.cd/youth-korea Korea Twitter: @OECD_social Stefano Scarpetta , Director for Employment, Labour and Social Affairs Veerle Miranda , Senior Economist
OECD work on youth Jobs for Youth reviews (2006 - 2010): 16 countries • Youth-friendly employment policies and practices Investing in Youth reviews (2014 - 2019): 12 countries • Special focus on disadvantage youth / NEETs • Employment, social and education policies Society at a Glance 2016: A Spotlight on Youth 2
INVESTING IN YOUTH: KOREA CONTEXT AND CHALLENGES Stefano Scarpetta
Low youth employment rate Employment rates among 25-34-year olds, 2018 % 100 90 80 70 60 50 40 30 20 10 0 Source: OECD Labour Force Statistics 4
Young Koreans are extremely educated Highest educational attainment among 25-34 year olds Less than upper secondary Upper or post-secondary Tertiary % 100 90 80 70 60 50 40 30 20 10 0 Source: OECD Education at a Glance 2019 5
100 Source: OECD Labour Force Statistics 10 20 30 40 50 60 70 80 90 % 0 Mexico United Kingdom Few students work while studying Turkey New Zealand Slovak Republic Hungary Latvia Share of youth in education and employment, 2017 Japan Poland In education, not employed Israel Estonia Korea Canada United States Chile Czech Republic France Austria Ireland Italy OECD Switzerland Sweden Australia In education, employed Belgium Lithuania Portugal Iceland Spain Greece Germany Norway Finland Luxembourg Slovenia Denmark Netherlands 6
Young workers perform relatively well in dual labour market Employment conditions by age, 2017 Panel A: Temporary employment Panel B: Low pay Korea OECD Korea OECD 70 80 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 Total 15-24y 25-54y 55-64y 65y+ Total 15-24y 25-35y 35-44y 45-54y 55-64y 65y+ Source: OECD Labour Force Statistics 7
Rising youth unemployment Trend in unemployment rates, Korea and OECD 15-24-year olds 25-34-year olds Korea OECD Korea OECD 18 18 18 16 16 16 14 14 14 12 12 12 10 10 10 8 8 8 6 6 6 4 4 4 2 2 2 0 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: OECD Labour Force Statistics 8
High NEET rate Percentage of 15 to 29 year olds who were not in employment, education or training (NEET), 2017 Inactive Unemployed 30 25 18.4% 20 13.4% 15 10 5 0 Source: Calculations based on Labour Force Surveys and OECD Education at a Glance 2018 9
Informal education and entry exams Activities of NEETs, 2017 Parenting or house work 14% Unemployed Other 22% 4% Military 4% Informal education Relaxing 16% 17% Entrance preparation Employment preparation 6% 17% Source: OECD calculations based on the 2017 Youth Supplement to the Economically Active Population Survey 10
Combining work and family Labour force participation rates by age group, 2018 Korea Men Korea Women OECD Men OECD Women % 100 90 80 70 60 50 40 20 to 24 25 to 29 30 to 34 35 to 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 Source: OECD Labour Force Statistics 11
Low life satisfaction Life satisfaction among 15-year olds, 2015 Adolescents reporting high life satisfaction Adolescents reporting low life satisfaction % 70 60 50 40 30 20 10 0 Source: OECD Children Well-Being Dataset 12
Context and challenges Important educational investments Labour market duality Low employment rates Skill mismatches Highly educated and skilled labour force High job search costs High NEET rates
INVESTING IN YOUTH: KOREA MAIN POLICY CONCLUSIONS Veerle Miranda
OECD Action Plan for Youth Tackle youth Strengthen long-term unemployment employment prospects - Tackle weak aggregate - Reduce school drop-out demand and boost job - Improve the role and creation effectiveness of VET - Provide adequate income and - Provide good quality career activation support guidance - Expand cost-effective active - Reshape labour market policy labour market measures and institutions - Address demand-side barriers - Tackle social exclusion 15
REDUCING THE GAP BETWEEN SKILL SUPPLY AND DEMAND
Significant qualification mismatch Mismatch rates by highest educational attainment, 2015 % Over-qualification Under-qualification Field of study mismatch 50 50 40 40 30 30 20 20 10 10 0 0 Upper secondary College University Source: OECD calculations based on Youth Panel (National Youth Policy Institute, 2015) 17
Guiding students to improve educational choices Major investments have been made: • Creation of career awareness in primary schools • Career exploration in lower secondary schools • Career planning in upper secondary schools Possible improvements to boost the payoffs: • Better training for counsellors and more budget could increase the effectiveness of career guidance • Adaption of career counselling to the needs of disadvantage youth • Involvement of employers in career counselling 18
Limited use of apprenticeships Apprentices in programmes leading to upper-secondary or short postsecondary qualifications as a share of all students enrolled in upper-secondary and short postsecondary education aged 16-25, 2012 and 2017 % 35 30 25 20 15 10 2017 5 0 Source: Kuczera, M. (2017), "Striking the right balance: Costs and benefits of apprenticeship", 19 OECD Education Working Papers, No. 153, OECD Publishing, Paris.
Promoting upper secondary vocational education Possible improvements: • Use the success of the Meister schools as a template for quality improvements in secondary vocational education • Expand existing apprenticeship programmes o Longer programmes o Programmes in the service sector o Involvement of large employers • Reduce the cost of apprenticeships for employers o Financial assistance for the creation of joint training centres 20
High spending on non-tertiary education Total expenditure on educational institutions per full-time equivalent student (2016) In equivalent USD converted using PPPs Primary, secondary, and post-secondary non-tertiary education 25 000 20 000 15 000 10 000 5 000 0 Source: Education at a Glance (OECD, 2019) 21
Limited spending on tertiary education Total expenditure on educational institutions per full-time equivalent student (2016) In equivalent USD converted using PPPs Tertiary education 60 000 50 000 40 000 30 000 20 000 10 000 0 Source: Education at a Glance (OECD, 2019) 22
Ensuring quality tertiary education Reform suggestions: • Strengthen quality through reporting • Refuse student loans for low performing institutions • Foster collaboration with employers 23
Ensuring quality tertiary education Reform suggestions: • Strengthen quality through reporting • Refuse student loans for low performing institutions • Foster collaboration with employers Supporting companies to alter their recruitment practices: • Provision of training in competency-based hiring to companies • Introduction of matching services for SMEs 24
SUPPORTING YOUTH IN THE LABOUR MARKET
Korea’s Youth Action Plan 2018 Expanding support for young Employment in large enterprises and employees and employers public institutions - Increase in subsidy for newly hired - Extended tax exemption for large regular employees enterprises when hiring young person - Increase in income tax exemption rate - Introduction of youth recruitment quota - Expansion of in-work support - Facilitation of honorary retirement - Expansion of certification of youth- friendly businesses Establishment of Youth Centre Housing and transportation support - Launch of online youth centres - Extension low-interest loan - Creation of 17 youth hub centres - Introduction of transportation cards Promotion of business start-ups 26
Addressing labour and product market duality • Growing dispersion in firms’ performance • Insider-outsider dynamics • Employment practices towards older workers and women • Global trends in globalisation and technological progress • Balanced employment protection legislation 27
Limited social spending Total public social expenditure as a share of GDP, 2000 and 2018 2018 2000 % 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 Source: OECD Social Expenditure Database (SOCX) 28
One in three young workers are not covered by Employment Insurance Share of workers aged 15-29 with and without employment safety net as a percentage of employed youth, 2017 Excluded wage Non-wage workers, 5% workers, 4% Employment safety of workers aged 15 to 29 Wage workers with employment safety net 64% Not enrolled 27% Not Excluded wage workers 4% enrolled, 27% Non-wage workers, of which 5% Wage workers with Self-employed 3% employment safety net, 64% Unpaid family workers 2% Source: OECD calculations based on the Economically Active Population Survey of Statistics Korea. 29
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