On the 14th, the Bank of Korea said the recent decline in the labor force participation rate among 25- to 34-year-old men with four-year college degrees or higher was due to intensified competition with women. The Bank of Korea (BOK) analyzed that young men with a high school diploma or less may have found it harder to enter the labor market as industrial restructuring reduced jobs in manufacturing and construction.
That day, the Bank of Korea released a report titled "Assessment of the declining trend in youth male labor force participation." Korea's overall labor force participation rate rose from 61.2% in 2000 to 64.5% last year. During this period, women ages 25 to 34 jumped from 52.4% to 77.5%, while men of the same age fell from 89.9% to 82.3%.
The Bank of Korea (BOK) said, "The declining trend in youth male labor force participation is common in most major advanced economies, including the United States, but Korea's drop is the largest among Organisation for Economic Co-operation and Development (OECD) countries and the trend is steep." The OECD youth male labor force participation rate exceeds 90% as of 2024.
The Bank of Korea (BOK) viewed one cause of the decline in labor force participation among highly educated young men with four-year college degrees or higher as intensified competition with women. According to a cohort analysis, for men, the younger the age, the lower the labor force participation rate. For example, the labor force participation rate of men born between 1991 and 1995 was 15.7 percentage points lower than that of those born between 1961 and 1970. In contrast, for women, the younger the age, the higher the rate. This suggests women may have replaced men in the labor market.
The Bank of Korea (BOK) said, "As women's labor supply has increased significantly, especially among the highly educated, young men appear to have faced even more intensified competition than before." Among young people with four-year college degrees or higher, the female-to-male ratio in the labor force surged from 51.5% in 2000 to 95.5% last year.
For young men with a high school diploma or less, the Bank of Korea (BOK) analyzed that industrial restructuring has made it harder to enter the labor market. Jobs in manufacturing and construction are decreasing, while service-sector jobs are increasing. However, young men with a high school diploma or less had mainly worked in the shrinking sectors, while women tend to work more in services.
The Bank of Korea (BOK) also viewed longer work tenures among older adults and the introduction of AI across industries as having generally reduced youth jobs. Employment among older adults has increased mainly in high-skill jobs such as managers, professionals, and office workers. This means young people who prefer these jobs inevitably enter the labor market relatively later. In addition, 98.3% of youth jobs lost over the past four years are said to be concentrated in industries with high AI exposure.
The Bank of Korea (BOK) noted, "Korea's labor market, characterized by strong employment rigidity, has a structure in which burdens imposed on corporations due to measures such as extending the retirement age are shifted to young people, who are outsiders to the labor market." It added, "Measures are also needed to reasonably adjust the excessive level of employment protection in the primary labor market centered on regular jobs and large companies, and to raise the conversion rate of nonregular workers to regular positions."