Human Capital Development, Social Protection, & Income Gap in Post-Crisis Korea

Seok-Hyeon Choi, Tae-Jeong Lee, & Pan-Suk Kim

Institute for Poverty Alleviation and International Development (IAPID) Yonsei University at Wonju, South Korea

Background: Volatile Growth Annual Real GDP Growth Rates (1954Decade 2009) (%) Annual Growth Rates of Real GDP, Average of
1954-2009

Source: T.J Lee (2011)

IPAID, Yonsei University

Structural Changes: Industrial Concentration w/ jobless Growth

Sales of Top 30 Conglomerates, Smaller Business Groups & Independent Business

Structural Changes: Industrial Concentration w/ jobless Growth

End-of-Year Number of Employees of Top 30 Conglomerates, Smaller Business Groups, and Independent Businesses

Structural Changes in the Labor Market of PostCrisis

Unemployment Rate

Structural Changes in the Labor Market of PostCrisis

Unemployment Rate by Level of Education

Mismatch between Supply and Demand

Mismatch between Supply and Demand

Unemployment Rate of the Younger Generation between age 20-29 by level of Education

Segmentation of Labor Market

Average Tenure by Size of Businesses

Segmentation of Labor Market

Ratio of Monthly Salary of High School Graduates to That of College (%)

Polarization of Income

Average Monthly Income of Urban Households (Korean Won)

Social Protection after Crisis

Increase in the level of Unemployment Protection

Subsidy for skill development for the unemployed through unemployment benefits and re-training program

Skill development system

Expanded mainly from large company workers to small-medium sized company

Shortage in the government subsidy for employment insurance expense

Limited subscription eligibility to non-regular workers that the numbers are in continuous

benefiting large company workers, and providing skill development

Level of Education for Korea, 1955-2005

Average Annual Spending on Education by Household Income Level

Source: https://kosis.kr.Korea Statistics IPAID, Yonsei University Office

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Continuous Education Spending after Graduation

Fraction of Fresh College Graduates in the Total Recruitment Time Spent after Graduation until Findings the First Job (%)
lesst 3-6 han 3mont mont h h 6 2-3 2-3 mont year year h- 1 year more Total than 3 year

2006 53.5 2007 55

11.5 10.7 12.5 12 13.7

9.2 9.2 9.8 9.5 9.6

10.3 10.5 11.4 11 10.4

5.3 5.4 5.3 5.3 5.4

10.2 9.2 9 8.8 8.3

100 100 100 100 100

2008 52.1 2009 53.5 2010 52.6

Source: https://kosis.kr.Korea Statistics Office, IPAID, Yonsei University KEIS(2009)

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Unequal opportunity for Human Capital Development

Fraction of Firms with InPlant Training Facility by Size Expenditure on Employee Training per Person by Firm Size

Source: https://kosis.kr.Korea Statistics Office, KEIS(2009)

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Policy Implications

Education policy 1) To strengthen vocational education at high school level 2) To increase public spending on tertiary education 3) To expand scholarships and loans on necessity basis Policies for training and educating workers 1) To support training and education of the SMEs employers 2) To provide training and re-training for the unemployed Policies for disseminating information in the labor market To effectively intermediate manpower search job search and
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