[Why&Next] Elderly Unemployment Rate Surges at Year-End and New Year... Distortion Grows Due to Employment Program Effects

Elderly Unemployment Rate Rises Every January and December
Similar Trend Seen from 2021 to Last Year
Timing of Senior Employment Programs Plays a Role
Share of Economically Active Population Aged 60 and Over Reaches 23.8%
Distortion in

The phenomenon of a sharp rise in the unemployment rate among the elderly at the end and beginning of each year has continued in recent years. This is a result of employment surveys being conducted around the start and end points of the government’s direct job creation programs. As the population ages rapidly and more elderly people participate in economic activities, there are concerns that this trend could significantly distort the overall unemployment rate. Experts suggest that, to properly assess the overall employment situation, it is necessary to analyze data over a longer period, such as by year, rather than focusing on short-term fluctuations.

According to the Ministry of Economy and Finance and the National Data Office on January 21, the unemployment rate for those aged 60 and over stood at 8.4% in December of last year, following a high of 7.0% in January of the same year. This 8% range is up to eight times higher than the 1-3% range recorded in other months. It was also the highest among all age groups over 15. The youth unemployment rate (ages 15-29) followed at 6.2%, while the rates for those in their 30s (3.0%), 40s (1.9%), and 50s (1.6%) all remained relatively low.

This spike in the unemployment rate for those aged 60 and over in January and December has persisted for several years. Analysis of the Economically Active Population Survey from the National Statistical Portal (KOSIS) shows the same pattern over the past five years, from 2021 to last year. In 2024, the unemployment rates for January and December were 6.6% and 8.0%, respectively, standing out compared to the 1-3% range in other months. In 2023, the rates were 6.4% and 5.7%, and in 2022, 8.4% and 5.2%. In January 2021, the rate even exceeded 10%, reaching 10.8%, with December of that year also high at 6.4%.

This trend becomes even more pronounced when narrowing the focus to those aged 65 and over. In January and December of last year, the unemployment rates for this age group were 9.6% and 11.9%, respectively. Excluding January and December, the highest monthly unemployment rate that year was in February, at 3.8%. A similar pattern was observed in 2024, with January and December rates at 9.4% and 11.6%. Although the rate dropped to as low as 1.0% in August of that year, it surged again toward the year’s end.

The government attributes this phenomenon to its direct job creation programs, which mainly target elderly employment for those aged 60 and over. In particular, public sector jobs for seniors are available to those aged 65 and over who receive the basic pension. The start and end dates for these senior jobs are typically in early to mid-January and early to mid-December. As a result, when there is a gap between the timing of the labor force survey and the job program schedule, structural factors can cause the unemployment figures to spike.

An official from the National Data Office explained, “The Economically Active Population Survey examines employment status during the week that includes the 15th of each month. In January, if the senior job program has not yet started during the survey period, those scheduled to participate are considered to be seeking work and available for work, so they are classified as unemployed in the survey.” The official added, “When the senior job program ends in early December, the period until the end of the year is when recruitment for the following year’s jobs takes place. Seniors aged 60 and over who apply for jobs during this period are also considered to be seeking and available for work, and are therefore classified as unemployed in the survey.”

The problem is that these temporary spikes in elderly unemployment rates are increasingly likely to inflate the overall unemployment rate, creating a misleading effect. In January and December of last year, the overall unemployment rate for those aged 15 and over was 3.7% and 4.1%, respectively, higher than the 2-3% range seen in other months. The same trend continued in 2024. As the proportion of elderly people in the population increases, this phenomenon is expected to become more pronounced. The share of those aged 60 and over among the economically active population (employed plus unemployed) aged 15 and over rose from 19.8% in 2021 to 23.8% last year, an increase of 4.0 percentage points.

The government is aware of this situation. A Ministry of Economy and Finance official said, “Since the proportion of elderly people is expected to grow, it is necessary to interpret unemployment statistics with caution.” Ultimately, experts advise that to assess the overall labor market, it is better to analyze data by quarter or year, rather than focusing on specific months. Lee Jeonghee, professor of economics at Chung-Ang University, commented, “Monthly figures can be influenced by seasonal factors. Only by looking at annual data can we properly assess the overall unemployment situation.”