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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
Sustaining Korea's Convergence to the Highest-Income Countries
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- Randall S. Jones1, Satoshi Urasawa1
- Author Affiliations
- 1: OECD, France
- 05 June 2012
- Bibliographic information
While Korea remains one of the fastest-growing OECD economies, its potential growth rate per capita is projected to decelerate from around 4% during the current decade to around 2¼ per cent during the 2030s. Sustaining growth requires policies to mitigate the impact of rapid population ageing by increasing labour inputs from under-utilised segments of the population. In particular, female labour participation should be encouraged by better work-life balance and increasing the availability of high-quality, affordable childcare, in part by raising tuition fee subsidies and improving the quality of private childcare centres. More flexible employment and wage systems would increase the age at which older workers leave firms. For young people, improved vocational education at the secondary and tertiary levels would help overcome the labour mismatch problem and the overemphasis on tertiary education. Enhancing educational quality at all levels would promote productivity gains, including in services. Strengthened competition is also a key to narrow the large productivity gap between services and manufacturing.
- potential growth, labour force participation rates, tax reform, ECEC, older workers, labour market dualism, Korean economy, education, non-regular workers, R&D, vocational education, tertiary education, Korea, services sector, VAT, SMEs, childcare, innovation, female employment
- JEL Classification:
- H2: Public Economics / Taxation, Subsidies, and Revenue
- I2: Health, Education, and Welfare / Education and Research Institutions
- J2: Labor and Demographic Economics / Demand and Supply of Labor
- O4: Economic Development, Innovation, Technological Change, and Growth / Economic Growth and Aggregate Productivity
- O53: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Asia including Middle East