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Korea has made significant progress towards decentralising the management of employment and training programmes, but can still do more to create stronger links with employers at the local level, according to a new OECD report.
With the rising economic importance of human resources and skills, employment and training agencies are now often expected to play a more important role in local strategies to support new creation, facilitate restructuring and increase productivity. The OECD Local Economic and Employment Development (LEED) Programme has developed an international cross-comparative study examining the contribution of local labour market policy to
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Korea is still one of the countries with the lowest unemployment rate in the OECD countries – 3.7% in the second quarter of 2014. Nonetheless, Korea’s labour market has some structural challenges, one of which has been a relatively low employment rate, implying that the size of the inactive population is large.
Labour market reform to improve growth prospects and reduce inequality is a top priority in the face of rapid population ageing and a dualistic labour market. Sustaining output growth requires policies to mitigate the impact of rapid population ageing by increasing labour inputs from under-employed segments of the population.
Korea should strengthen its social safety net and improve support for laid-off workers to help them find a new job more quickly, according to a new OECD report.
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This report was prepared to help Korea identify and address main social policy challenges. It suggests specific policy options and a strategy to “go social”, based on the practices and reforms that have worked well in other countries.
Sustaining economic growth is certainly important to promote social cohesion but growth alone cannot solve all problems. Instead, well-targeted social policies are essential to promote social cohesion and reverse the upward trend in income inequality. This is the “go social” challenge facing Korea, said OECD Secretary-General in Seoul.
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