Directorate for Employment, Labour and Social Affairs
Korea: Improving the Re-employment Prospects of Displaced Workers
In Korea's dynamic labour market, job displacement (involuntary job loss due to firm
closure or downsizing) affects many workers over the course of their working lives.
Some workers are more vulnerable than others to this risk and may face long periods
of unemployment/inactivity after displacement, particularly if their skills are not
well-matched to emerging job opportunities. Even when they find new jobs, displaced
workers tend to be paid less, have fewer benefits and are more likely to be overskilled
than in the jobs they held prior to displacement. Helping displaced workers get back
into good jobs quickly should be a key goal of labour market policy. To achieve this
goal, Korea needs to increase resources devoted to re-employment programmes, such
as job-search training and job matching, to improve their performance and better target
those who need the most help. Existing training programmes need to be revised to ensure
that people are obtaining skills that will help them find work. The social safety
net also needs to be strengthened to lower the personal and societal costs of displacement,
notably by improving the coverage of unemployment benefits.