Korea Twitter: @OECD_social Stefano Scarpetta , Director for - - PowerPoint PPT Presentation

Stefano Scarpetta, Director for Employment, Labour and Social Affairs Veerle Miranda, Senior Economist

Investing in Youth Korea

Seoul, 29 October 2019 http://oe.cd/youth-korea Twitter: @OECD_social

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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

OECD work on youth

INVESTING IN YOUTH: KOREA CONTEXT AND CHALLENGES Stefano Scarpetta

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Low youth employment rate

Source: OECD Labour Force Statistics

Employment rates among 25-34-year olds, 2018

10 20 30 40 50 60 70 80 90 100 %

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Young Koreans are extremely educated

Highest educational attainment among 25-34 year olds

Source: OECD Education at a Glance 2019

10 20 30 40 50 60 70 80 90 100 Less than upper secondary Upper or post-secondary Tertiary

%

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Few students work while studying

Source: OECD Labour Force Statistics

Share of youth in education and employment, 2017

10 20 30 40 50 60 70 80 90 100 Mexico United Kingdom Turkey New Zealand Slovak Republic Hungary Latvia Japan Poland Israel Estonia Korea Canada United States Chile Czech Republic France Austria Ireland Italy OECD Switzerland Sweden Australia Belgium Lithuania Portugal Iceland Spain Greece Germany Norway Finland Luxembourg Slovenia Denmark Netherlands

%

In education, not employed In education, employed

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Young workers perform relatively well in dual labour market

Source: OECD Labour Force Statistics

Employment conditions by age, 2017

Panel A: Temporary employment Panel B: Low pay

10 20 30 40 50 60 70 Total 15-24y 25-54y 55-64y 65y+ Korea OECD 10 20 30 40 50 60 70 80 Total 15-24y 25-35y 35-44y 45-54y 55-64y 65y+ Korea OECD

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Rising youth unemployment

Source: OECD Labour Force Statistics

Trend in unemployment rates, Korea and OECD

2 4 6 8 10 12 14 16 18

15-24-year olds

Korea OECD 2 4 6 8 10 12 14 16 18 2 4 6 8 10 12 14 16 18 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

25-34-year olds

Korea OECD

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High NEET rate

Source: Calculations based on Labour Force Surveys and OECD Education at a Glance 2018

Percentage of 15 to 29 year olds who were not in employment, education

• r training (NEET), 2017

5 10 15 20 25 30 Inactive Unemployed 18.4% 13.4%

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Informal education and entry exams

Activities of NEETs, 2017

Source: OECD calculations based on the 2017 Youth Supplement to the Economically Active Population Survey

Unemployed 22% Informal education 16% Employment preparation 17% Entrance preparation 6% Relaxing 17% Military 4% Other 4% Parenting or house work 14%

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Combining work and family

Labour force participation rates by age group, 2018

Source: OECD Labour Force Statistics

40 50 60 70 80 90 100 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

Korea Men Korea Women OECD Men OECD Women %

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Low life satisfaction

Source: OECD Children Well-Being Dataset

Life satisfaction among 15-year olds, 2015

10 20 30 40 50 60 70 Adolescents reporting high life satisfaction Adolescents reporting low life satisfaction %

Important educational investments Labour market duality Context and challenges

Highly educated and skilled labour force Low employment rates Skill mismatches High job search costs High NEET rates

INVESTING IN YOUTH: KOREA MAIN POLICY CONCLUSIONS Veerle Miranda

Tackle youth unemployment

• Tackle weak aggregate

demand and boost job creation

• Provide adequate income and

activation support

• Expand cost-effective active

labour market measures

• Address demand-side barriers

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OECD Action Plan for Youth

Strengthen long-term employment prospects

• Reduce school drop-out
• Improve the role and

effectiveness of VET

• Provide good quality career

guidance

• Reshape labour market policy

and institutions

• Tackle social exclusion

REDUCING THE GAP BETWEEN SKILL SUPPLY AND DEMAND

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Significant qualification mismatch

Source: OECD calculations based on Youth Panel (National Youth Policy Institute, 2015)

Mismatch rates by highest educational attainment, 2015

10 20 30 40 50 10 20 30 40 50 Upper secondary College University Over-qualification Under-qualification Field of study mismatch %

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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

5 10 15 20 25 30 35

%

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Limited use of apprenticeships

Source: Kuczera, M. (2017), "Striking the right balance: Costs and benefits of apprenticeship", OECD Education Working Papers, No. 153, OECD Publishing, Paris.

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

2017

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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
• Longer programmes
• Programmes in the service sector
• Involvement of large employers
• Reduce the cost of apprenticeships for employers
• Financial assistance for the creation of joint

training centres

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High spending on non-tertiary education

Source: Education at a Glance (OECD, 2019)

Total expenditure on educational institutions per full-time equivalent student (2016) In equivalent USD converted using PPPs

5 000 10 000 15 000 20 000 25 000

Primary, secondary, and post-secondary non-tertiary education

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Limited spending on tertiary education

Source: Education at a Glance (OECD, 2019)

Total expenditure on educational institutions per full-time equivalent student (2016) In equivalent USD converted using PPPs

10 000 20 000 30 000 40 000 50 000 60 000

Tertiary education

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Ensuring quality tertiary education

Reform suggestions:

• Strengthen quality through reporting
• Refuse student loans for low performing institutions
• Foster collaboration with employers

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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

SUPPORTING YOUTH IN THE LABOUR MARKET

Expanding support for young employees and employers

• Increase in subsidy for newly hired

regular employees

• Increase in income tax exemption

rate

• Expansion of in-work support
• Expansion of certification of youth-

friendly businesses Housing and transportation support

• Extension low-interest loan
• Introduction of transportation cards

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Korea’s Youth Action Plan 2018

Employment in large enterprises and public institutions

• Extended tax exemption for large

enterprises when hiring young person

• Introduction of youth recruitment

quota

• Facilitation of honorary retirement

Establishment of Youth Centre

• Launch of online youth centres
• Creation of 17 youth hub centres

Promotion of business start-ups

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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

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Limited social spending

Source: OECD Social Expenditure Database (SOCX)

Total public social expenditure as a share of GDP, 2000 and 2018

5 10 15 20 25 30 35 5 10 15 20 25 30 35 2018 2000 %

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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

Wage workers with employment safety net 64% Not enrolled 27% Excluded wage workers 4% Non-wage workers, of which 5% Self-employed 3% Unpaid family workers 2% Employment safety of workers aged 15 to 29 Wage workers with employment safety net, 64% Not enrolled, 27% Excluded wage workers, 4% Non-wage workers, 5% Source: OECD calculations based on the Economically Active Population Survey of Statistics Korea.

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Expanding the social safety net for young people

Policy options:

• Better enforcement of social security legislation
• More resources for inspection
• Higher penalties
• Rigorous application of arbitration procedure to claim EI

entitlements

• Expansion of eligibility for EI to voluntary job leavers

(GER: suspension; FRA: sanction)

• Incorporation of non-standard forms of employment in the

Employment Insurance

• Easier access to the Basic Livelihood Security Programme

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Offering adequate employment support for young unemployed

Policy options:

• Improving outreach in the Employment Success Package

Programme

• Youth outreach workers (AUT, BEL, IRL, FIN, SWE, UK)
• Mobile employment services (EST, GER)
• Stronger collaboration between the education sector and

employment services (NOR, JPN)

• Outreach as evaluation element
• Stricter quality assessment of private employment service

provision

• Addressing short duration of private providers’ contracts

(AUS/UK: 6 years)

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Overview of policy conclusions

Weakening labour market

• Break down product market polarisation
• Improve social safety net
• Offer adequate employment support

Skills mismatch

• Increase effectiveness of career guidance and counselling
• Promote upper secondary vocational education
• Ensure quality of tertiary education
• Support companies to use competency-based hiring

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Contacts: Stefano Scarpetta (Stefano.Scarpetta@oecd.org) Veerle Miranda (Veerle.MIRANDA@oecd.org) Website: http://oe.cd/youth-korea Twitter: @OECD_social @stescarpetta

Thank you