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Increasing productivity growth in the service sector, which accounts for 67% of employment and 58% of value added in Korea, is essential to sustain high potential growth.
Korea has one of the lowest tax burdens in the OECD area, reflecting its small public sector. However, rapid population ageing will put upward pressure on government spending.
The age of retirement of employees should be raised by eliminating mandatory retirement and phasing out the retirement allowance. Active labour market policies should focus on policies to expand human capital rather than wage subsidies.
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This note, taken from Chapter 2 of Economic Policy Reforms: Going for Growth 2007, contains information about the progress in implementing reforms in line with the 2006 priorities for Korea.
Summary of Economic Surveys: Korea
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This note, taken from Chapter 2 of Economic Policy Reforms: Going for Growth 2006, contains information about the progress in implementing reforms in line with the 2005 priorities for Korea.
In addition to passing of legislation or other decisions to implement reforms, the note records earlier stages of reform, such as government announcements and draft legislation presented to parliaments.