{"id":2203701,"date":"2024-02-01T18:21:15","date_gmt":"2024-02-01T09:21:15","guid":{"rendered":"https:\/\/koreapro.org\/?p=2203701"},"modified":"2024-02-02T17:25:16","modified_gmt":"2024-02-02T08:25:16","slug":"how-south-koreas-young-adult-crisis-challenges-nations-economic-goals","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/02\/how-south-koreas-young-adult-crisis-challenges-nations-economic-goals\/","title":{"rendered":"How South Korea\u2019s young adult crisis challenges nation\u2019s economic goals"},"content":{"rendered":"

An emerging trend among young South Koreans is drawing attention to its implications for the economy and society. A growing segment of the youth population, classified as NEET (neither in education, employment, nor training), is neither engaged in the job market nor in educational pursuits.<\/span><\/p>\n

As of Oct. 2023, South Korea\u2019s NEET population has risen to <\/span>over 410,000<\/span><\/a>, making up about 4.9% of the nation\u2019s 15 to 29-year-old demographic group. This group is often <\/span>overlooked<\/span><\/a> in traditional unemployment statistics, which count only those actively seeking work.<\/span><\/p>\n

The increase in NEETs poses a significant economic concern. A 2021 report by the Korea Economic Research Institutes <\/span>estimates<\/span><\/a> the annual impact of this demographic at approximately $52 billion (61.7 trillion won), equivalent to 3.2% of South Korea\u2019s gross domestic product.<\/span><\/p>\n

The issue extends into the realm of mental health and social well-being. Studies <\/span>link<\/span><\/a> long-term unemployment and disengagement to increased risks of depression and social isolation. This is reflected in the experiences shared by individuals like Lee Mi-seon, a 29-year-old office worker who spoke to <\/span>Korea Pro<\/span><\/i> about the challenges she encountered during a prolonged job search.<\/span><\/p>\n

\u201cAt some point, waking up every morning became an immense struggle,\u201d Lee told <\/span>Korea Pro<\/span><\/i>.<\/span><\/p>\n

Park Eun-mi, the CEO of Neetpeople, a civic group that supports NEET youths supported Lee\u2019s claims.<\/span><\/p>\n

\u201cMany of those seeking our help have previously faced periods of social withdrawal or are currently dealing with depression and a lack of motivation,\u201d Park said.<\/span><\/p>\n

Research predominantly <\/span>focuses<\/span><\/a> on difficult job market conditions and a lack of quality employment opportunities to explain the rise of this demographic group. However, there is an increasing argument for viewing the problem through a wider social and cultural context, suggesting that the issue goes <\/span>beyond economic factors<\/span><\/a>.<\/span><\/p>\n

\"\"

A university graduate | Image: Canva<\/em><\/p><\/div>\n

GOLDEN TICKET SYNDROME<\/b><\/p>\n

The Organization for Economic Cooperation and Development (OECD) regularly <\/span>releases<\/span><\/a> data on the prevalence of NEET youths across various countries. Although diverse factors influence NEET youth groups in different regions, the OECD usually points to some common denominators, such as <\/span>undereducation<\/span><\/a>, as key predictors of NEET status.<\/span><\/p>\n

However, South Korea presents a contrasting scenario. The country records one of the highest college entrance rates among OECD nations, with <\/span>73.3%<\/span><\/a> of high school graduates proceeding to higher education institutions as of 2022. This has led to a unique situation where 45% of the country\u2019s NEET youths have some type of tertiary education, a figure significantly higher than the OECD average of 18% as per <\/span>2017 data<\/span><\/a>.<\/span><\/p>\n

This anomaly can be traced back to the deeply entrenched societal belief in South Korea that equates higher education with securing a well-paying job.<\/span><\/p>\n

\u201cKoreans treat education as just a tool to help us secure high-paying jobs,\u201d Lee, the 29-year-old office worker, said. \u201cWhen I was in school, I wasn\u2019t given the opportunity to figure myself out or learn what I genuinely liked. Like everyone else, I was forced to hit the books.\u201d<\/span><\/p>\n

The 2022 OECD Economic Survey of Korea <\/span>criticized<\/span><\/a> this attitude toward education, calling it the \u201cgolden ticket syndrome\u201d \u2014 a term that encapsulates the intense competition among youths for admission into prestigious universities.<\/span><\/p>\n

The commitment to education in South Korea is further highlighted by the country\u2019s spending on private education, which <\/span>peaked<\/span><\/a> at $19.8 billion (26 trillion won) last year, accounting for 1.2% of the nation\u2019s GDP.<\/span><\/p>\n

This substantial investment in education has led to many young people being reluctant to accept positions at smaller firms, preferring to extend their job search in hopes of landing roles that meet their expectations. This tendency is particularly <\/span>pronounced<\/span><\/a> among youths whose parents are highly educated and who continue to live with their parents.<\/span><\/p>\n

\u201cIn the 1970s and 80s, getting into a good university guaranteed a decent job. But things have changed significantly in the job market since then,\u201d Han Dong-wook, the vice chair of Pie for Youth, a group supporting socially reclusive youths, told <\/span>Korea Pro<\/span><\/i>.<\/span><\/p>\n

\u201cBut many parents still force their children to go through the same steps that they took when they were younger, resulting in an oversupply of overqualified youths who struggle to envision alternative paths beyond what their parents told them.\u201d<\/span><\/p>\n

The pursuit of quality jobs leads South Korean youths to spend an average of <\/span>10.4 months<\/span><\/a> job hunting after college graduation, with some taking up to three years to secure employment. Notably, the proportion of NEET youths increases significantly when the period of joblessness extends <\/span>beyond three years<\/span><\/a>.<\/span><\/p>\n

This prolonged state of unemployment can lead to \u201cself-handicapping,\u201d a state where the prolonged job search turns into a cycle of failure and diminished motivation.<\/span><\/p>\n

\u201cAt some point, young people who fail to find the jobs they desire don\u2019t wish to try anymore because they fall into this mindset where they believe that it is less humiliating to be unemployed because they aren\u2019t looking for work than accepting that they have given their all but still failed,\u201d Lee, the office worker said.<\/span><\/p>\n

LABOR MARKET DUALISM<\/b><\/p>\n

Another significant element prolonging the job search for college graduates in South Korea is the heightened emphasis on securing an ideal start to their careers. The significance of the first job can be attributed to South Korea\u2019s job market, where a sharp divide exists between large and small companies, especially in terms of compensation and welfare benefits.<\/span><\/p>\n

According to data from the Korean Statistical Information Service, employees at larger corporations in 2021 earned, on average, more than <\/span>double<\/span><\/a> the salary of those at smaller firms.<\/span><\/p>\n

\u201cYoung people actively share information on wage differences on social media. So, they are keenly aware of the pay differences between big and small businesses. And that further fuels young people\u2019s desire to land a job at one of the larger corporations,\u201d Park Hye-jeong, who secured a one-year contract as a content researcher after a six-month job hunt, told <\/span>Korea Pro<\/span><\/i>.<\/span><\/p>\n

The Korean labor market’s inflexibility further fuels this sentiment. In 2021, only about <\/span>11%<\/span><\/a> of employees from smaller companies managed to transition to roles at larger firms, as per Statistics Korea.<\/span><\/p>\n

Compounding this issue is the clear <\/span>distinction<\/span><\/a> and often discrimination between regular and non-regular employees. Non-regular employees, including temporary, contract and dispatched workers, generally experience lower job security, lower wages and fewer benefits compared to their regularly employed counterparts.<\/span><\/p>\n

\"\"

Wage gap depiction | Image: Canva<\/em><\/p><\/div>\n

THE GOVERNMENT\u2019S TASK<\/b><\/p>\n

The growth of the NEET youth population in South Korea poses significant risks, potentially exacerbating various national issues.<\/span><\/p>\n

\u201cIf this trend continues, it will become more challenging for Korean youths to become financially independent from their parents as they will continue to rely on their parents for support,\u201d Han from Pie for Youths said. \u201cWhat will happen to these youths after their parents pass away?\u201d<\/span><\/p>\n

This situation could further strain the country\u2019s elderly poverty levels, which are already <\/span>among the highest<\/span><\/a> among OECD nations, as parents find it challenging to save for retirement while supporting their adult children.<\/span><\/p>\n

Moreover, the NEET status often <\/span>impedes<\/span><\/a> critical life milestones like marriage and starting a family, potentially contributing to South Korea\u2019s low birth rate.<\/span><\/p>\n

In response to these challenges, the Yoon Suk-yeol administration <\/span>announced<\/span><\/a> in November a plan to allocate approximately $769 million (1 trillion won) aimed at re-integrating NEET youths into the labor market. The initiative focuses on expanding job-matching services and enhancing job-experience opportunities in the private and public sectors.<\/span><\/p>\n

However, critics have called into question the effectiveness of this approach, as it does not address underlying issues like the societal preference for employment at large companies. Han emphasized that altering the entrenched social norms and expectations regarding education and career paths is a long-term endeavor and cannot be resolved swiftly.<\/span><\/p>\n

An effective strategy, as suggested in the 2022 OECD report, involves government intervention to balance the disparities between large and small firms.<\/span><\/p>\n

\u201cIf the government can introduce more support for start-ups and improve working conditions at the small companies, it will provide great incentives for youths to start their careers at those firms,\u201d content researcher Park told <\/span>Korea Pro<\/span><\/i>.<\/span><\/p>\n

\u201cThe Yoon administration should seriously consider offering more direct financial benefits to youths who choose to work for smaller companies.\u201d<\/span><\/p>\n

While the Yoon administration <\/span>earmarked<\/span><\/a> about $10.8 billion (<\/span>14.6 trillion won<\/span><\/a>) for youth employment initiatives in the 2024 budget \u2014 a substantial increase of about $1.5 billion (2 trillion won) from 2023, it remains to be seen if that will be sufficient.\u00a0<\/span><\/p>\n

Edited by John Lee<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Culture & Society<\/span><\/a>Domestic Politics<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

An emerging trend among young South Koreans is drawing attention to its implications for the economy and society. A growing segment of the youth population, classified as NEET (neither in education, employment, nor training), is neither engaged in the job market nor in educational pursuits. As of Oct. 2023, South Korea\u2019s NEET population has risen […]<\/p>\n","protected":false},"author":10407,"featured_media":2203702,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[24,25,27],"class_list":["post-2203701","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-business-economy","tag-culture-society","tag-domestic-politics"],"yoast_head":"\nHow South Korea\u2019s young adult crisis challenges nation\u2019s economic goals - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2024\/02\/how-south-koreas-young-adult-crisis-challenges-nations-economic-goals\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How South Korea\u2019s young adult crisis challenges nation\u2019s economic goals - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"An emerging trend among young South Koreans is drawing attention to its implications for the economy and society. 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