Last month, the number of employed individuals aged 65 and over was about 500,000 more than the number of employed individuals in their 20s (ages 20-29). Since March, when the number of employed individuals aged 65 and over surpassed that of those in their 20s, the gap has continued to widen. While structural factors such as low birth rates leading to an increase in the elderly population and a decrease in the youth population are present, this trend is also seen as an indication of the challenging conditions in the youth employment market. The reality in South Korea shows that the labor market entry for youth is delayed due to employment barriers, and elderly people still need to work to maintain their livelihood.
Meanwhile, even in terms of employment rates, those aged 60 and over surpassed the youth employment rate (ages 15-29, calculated as employed/population x 100) three quarters ago, and it is anticipated that their labor force participation rate will soon follow suit. This is due to the increasing number of young people who are not actively seeking employment, leading to a significant rise in the youth non-economic population.
According to the Statistics Korea National Statistical Portal (KOSIS) on the 18th, the number of employed individuals aged 65 and over was 4,035,000 last month. The number of employed individuals aged 65 and over has exceeded 4 million for three consecutive months since September. The increase in the number of employed has also exceeded 300,000 for three consecutive months.
Last month, the number of employed individuals in their 20s (ages 20-29) was 3,548,000, which was 487,000 fewer than those aged 65 and over. The number of young people employed, which had maintained a level of 3.7 million until last year, fell to the 3.5 million range as of September this year. The number of employed individuals in their 20s has been decreasing for 24 consecutive months since November 2022.
In employment indicators, it has been a long time since the increase in the number of employed individuals was driven by those aged 60 and over. In November, the overall number of employed increased by 123,000, with those aged 60 and over alone increasing by 298,000. Among them, those aged 65 and over alone increased by 303,000, while those aged 60-64 actually decreased by 5,000. The number of employed individuals in their 20s decreased by 170,000 in November.
The primary cause of the employment number gap can be found in age-specific population changes. In November, the population aged 65 and over was 10,157,000, an increase of 526,000 compared to the same month last year. During the same period, the population in their 20s was 5,835,000, a decrease of 226,000.
However, it cannot be attributed solely to population issues. Although the population growth rate for those aged 65 and over was 5.5%, their employment growth rate was 8.1%. In contrast, the population decline rate among those in their 20s was -3.7%, but their employment decline rate was -4.6%. This indicates that the barriers to labor market entry for young people have increased.
The employment and labor force participation rates of young and elderly demographics more clearly demonstrate this trend. Last month, the employment rate for young people (ages 15-29) was 45.5%, while that for those aged 60 and over was 47.3%.
The employment rates of these two age groups have continued to diverge since last April, when the youth employment rate was 46.2%, and the rate for those aged 60 and over was 46.8%. An employment rate represents the ratio of employed individuals within the labor force. This suggests that while it is becoming increasingly difficult for young people to secure jobs, it is relatively easier for the elderly.
The labor force participation rate between youth and the elderly is also narrowing. In November, the labor force participation rate for those aged 60 and over was 48.0%, while that of the youth was 48.1%, a mere 0.1 percentage point difference. In January 2023, the gap in labor force participation rate between these age groups was 6.1 percentage points. They have narrowed the gap by 6 percentage points in 22 months.
The rapid narrowing of the gap in labor force participation rates between these two age groups is due to the increase in non-economic activity among youth. The number of young people responding that they are "resting" rather than job hunting has surged, leading to a significant rise in the proportion of non-economically active youth. In November, the population of young people resting increased by 65,000 (20.2%) compared to the same month last year.
Woo Seok-jin, a professor in the Department of Economics at Myongji University, noted, “The expectation that one can move to a better job after entering the labor market has disappeared among young people, resulting in a sharp increase in those who are focusing only on large company open recruitment and are classified as resting,” adding that “a delay in the labor market entry of young people could shorten the period during which individuals have a surplus in their life cycle.” Prof. Woo further stated, “Nationally, this can lead to issues of reduced productivity, and personally, it could result in secondary problems such as increased poverty among the elderly due to insufficient retirement pensions. It is vital not to become complacent with the increase in the number of employed individuals, but to urgently formulate policies to improve the youth employment situation.”