[Asia Economy Reporter Kim Eunbyeol] The number of people in their 30s to 50s giving up on job seeking is increasing, especially among men. As the employment slowdown among the core working-age population becomes more pronounced, combined with the impact of the novel coronavirus infection (COVID-19), it is expected that employment improvement will become even more difficult in the future.
According to the Bank of Korea's 'BOK Issue Note' on the 21st, the increase in the number of employed people aged 30 to 50 has rapidly declined since 2010 and turned negative in 2018.
The employment growth rate of the core working-age population decreased from 2.2% during 2001?2007 to 1.9% during 2010?2014, and then sharply dropped to -0.2% in the recent five years from 2015 to 2019. The decline was even greater at -0.7% during 2018?2019. This rate fell below the population growth rate of the same age group (-0.6%), indicating that the pace of employment slowdown is accelerating.
Looking at the employment growth rate by age group, those in their 30s saw the decline deepen from -0.4% in 2010?2014 to -1.0% (also -1.0% in 2018?2019), those in their 40s dropped sharply from 0.8% to -1.2% (-2.1%), and those in their 50s saw the increase shrink significantly from 5.9% to 1.6% (1.1%).
The report stated, "The decline in employment growth rates for this age group since 2015 appears to be mainly due to population decline and reduced economic activity participation." Last year, the employment growth rate of the core working-age population was -0.51%, with population decline contributing 0.73 percentage points and the decrease in economic activity participation rate contributing 0.45 percentage points.
The Bank of Korea added, "The employment slowdown among the core working-age population negatively affects the economy by weakening growth potential and increasing the burden of elderly support. In particular, the recent spread of COVID-19, combined with the trend of declining employment in this group, may make their employment recovery more difficult."
While the overall economic activity participation rate continues to rise, the male economic activity participation rate is declining across all age groups except for those in their 40s. This contrasts with women, whose participation rates continue to increase except in the 40s. The authors explain that the recent decline in male economic activity participation is mainly due to a decrease in unemployed men actively seeking jobs. The proportion of men in the core working-age population transitioning from non-economic activity status to economic activity status fell from 39.3% at the end of 2001 to 28.6% at the end of 2019, a drop of 10.7 percentage points over about 20 years.
According to the Bank of Korea, although the overall economic activity participation rate is maintaining an upward trend, the participation rate of the core working-age population has turned downward since 2018 due to poor male economic activity. Causes include ▲lower job-seeking probability ▲industrial and occupational structural changes due to automation ▲mismatches between education, skills, and jobs.
A Bank of Korea official stated, "It is urgent to increase the economic activity participation rate to recover employment among the core working-age population," and suggested, "Expanding the social safety net to prevent the core working-age population from exiting the labor market, and promoting smooth job transitions and labor market re-entry through vocational training are necessary."
Furthermore, the official emphasized, "Given the possibility that the recent spread of COVID-19 may further shrink employment and economic activity among the core working-age population, policies to support employment retention and enhance their economic activity should be prepared to cushion the employment shock."
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