Table of Contents

  • The average age of the population of OECD countries is increasing fast, and the average age of the labour force is also increasing. In such a context, giving older people better work choices and incentives and access to good jobs is crucial for promoting economic growth and improving the sustainability of public social expenditures. Older people offer tremendous potential value to businesses and the economy but public policies and private workplace practices continue to pose barriers to work or fail to provide good work.

  • Korea is experiencing much faster population ageing than any other OECD country. If nothing is done to improve the labour market situation of older workers, this could put a brake on the trend of rising living standards observed in recent decades. There is no time for complacency: the median age of the population is projected to increase from 41 years today to 55 years in the mid-2050s, and the old-age dependency ratio (population aged 65 plus over the population aged 15-64) is projected to increase from 20% today to around 70% in 2050, 20 percentage points above the then OECD average.

  • Korea is currently in the midst of an unprecedented demographic transformation, with population ageing progressing faster than in any other OECD country. The median age of the population is projected to reach around 55 years by the mid-2050s, compared with a median age below 20 years back in the 1970s. There are currently less than 200 residents in Korea aged 65 and above for every 1 000 of the working-age population (ages 15-64) – well below the OECD average of 246 in 2015. The Korean figure, however, is projected to quadruple over the coming decades, exceeding the OECD average quickly and peaking at a projected 760 by around the year 2065 – the highest ratio of any OECD country.

  • This chapter evaluates the main demographic factors underpinning population ageing in Korea. It looks at some of the main impacts population ageing is likely to have on Korea’s labour market and on social cohesion and, by extension, on the broader economy.

  • This chapter evaluates the leading trends around employment outcomes for older workers in Korea. It focuses on a positive message and a concerning one: while older workers in Korea participate in the labour market more actively than their peers in any other OECD country, they face consistently poor labour market outcomes in terms of job quality – including around the type of work they do, their job security and the remuneration they receive. The analysis lays out some of the main contributing factors.

  • Maintaining the employability of workers throughout their working life is essential to ensure they can stay longer in the core labour market and hold decent jobs until they retire. For Korea, the challenge is threefold. First, as many workers have to start a second career after retiring from their main job, employment services and active labour market policies have an important role to play in helping workers make successful employment transitions. Second, in the medium term building an effective system of continuous vocational training is critical to ensure workers can use and upgrade their competencies and skills throughout their working life, to facilitate ending the practice of mandatory early retirement. Third, efforts to improve working conditions must continue to make working longer with full work capacity possible for older workers.

  • This chapter looks at how current policies and practices around hiring and firing affect older workers in Korea. The discussion focuses on potential rigidities introduced by Korea’s seniority-centred professional appraisal culture and the impact of its employment protection legislation for older workers. The discussion evaluates recent policy initiatives to address some of these issues and looks at how they might contribute to better outcomes. The conclusion outlines some concise recommendations for policy makers to consider.

  • This chapter examines the availability and adequacy of income support for older workers. While the main pillars of a comprehensive social protection system are in place, one-half of Korea’s population aged 65 and over lives in relative poverty. The chapter discusses options to extend and improve the different programmes. In particular, limited coverage and low payments reduce the impact of social welfare policies on poverty reduction. In addition, further reforms are needed to develop an effective three-pillar pension system based on the National Pension Scheme, company pensions and individual savings.