OECD Employment Outlook 2025: Korea
Table of contents
These country notes provide an overview of the labour market situation in each country based on data from OECD Employment Outlook 2025. This edition has a special focus on how population and workforce ageing will affect the labour market and workers’ jobs.
The OECD unemployment rate remains at 4.9% in May 2025 – the same as one year ago. However, there are signs of weakening, with employment growth decelerating and labour market tightness falling back to pre‑COVID‑19 levels in many countries.
Korea has maintained a relatively low unemployment rate, at or below 3% in the post-pandemic period. The Korea unemployment rate remains at 2.7% in May 2025 compared to 2.8% in May 2024 and 2.5% in May 2023 (See figure below).
The employment rate has been steadily increasing, reaching 68.8% in the first quarter of 2023, 69.5% in the first quarter of 2024, and 69.7% in the first quarter of 2025. During the same period, the employment rate for men was more than 10 percentage points higher than that for women. Employment to population rate has been continuously increasing in the post-pandemic, remaining below the OECD average.
Real wages are growing in virtually all OECD countries, but in half of them, they are still below the levels of early 2021 – just before the inflation surge that followed the pandemic.
Korea’s real wages have been consistently rising over the past few years, showing a particularly strong cumulative increase of over 2.9% since the first quarter of 2021, exceeding the OECD median.
The statutory minimum wage has been continuously rising, with the nominal minimum wage for 2025 increasing by 15% compared to 2021. However, high inflation since the first quarter of 2021 has limited the progression of the real minimum wage which stood to only 0.8%.
People around the world are living longer and healthier lives than ever before. This remarkable achievement has been accompanied by declining fertility, leading to significant demographic shifts. The number of old-age people per working-age person will rise by 67% by 2060 across the OECD. The share of people employed in the population will fall unless policies change, slowing down annual GDP per capita growth by 0.4 percentage points.
Korea’s working-age population has been steadily declining in the post-pandemic period. The group aged 15 to 64 has shrunk from 36.64 million in 2020 to 35.62 million in 2024. Specifically, with fertility rates of 0.78% in 2022 and 0.72% in 2023, Korea has the lowest fertility rate among OECD countries. This demographic shift significantly impacts the labour market. Korea’s employment-to-population is projected to decrease by 8.1% between 2023 and 2060. This figure significantly exceeds the OECD average decrease of 1.9%.
Conversely, the 55 to 64 age group consistently increased, rising from 8.04 million in 2020 to 8.41 million in 2024. This trend has been observed equally in both men and women. The employment rate for those aged 55‑64 was 69.9% as of 2024 exceeds the OECD average of 64.6% by more than 5 percentage points. It’s noteworthy that, while annual GDP per capita growth in Korea is projected at 1.8% over the period 2023‑60 – one of the highest in the OECD and above average historical growth – gains from untapped labour remaining substantial. This means Korea can boost growth despite demographic pressures by mobilizing underutilised labour resources, such as increasing labour force participation among women and the elderly, as well as promoting regular migration.
The Korea Government is actively responding to labour market demographic shifts particularly ageing and declining workforce through a range of policy measures aimed at extending working lives, such as enhancing lifelong learning, the promotion of retirement age extension and re‑employment of older workers, as well as the expansion of parental leave and strengthened maternity protection policies.
Employment of both men and women drops sharply after age 60 in most countries. Promoting lifelong learning, healthy workplaces, flexible retirement, and inclusive employer practices is essential to boost older workers’ employability and extend working lives.
The proportion of older workers aged 55‑64, relative to the total workforce aged 15‑64, in Korea’s labour force is steadily increasing from 22.2% in 2020 to 23.7% in 2024.
Unlike most OECD countries, Korea, along with Japan and Mexico, shows a higher effective retirement age than the normal retirement age. Among these three countries, Korea exhibits the largest gap, with a difference of 3.4 years for men and 5.4 years for women, indicating that women tend to work longer. This helps explain the high proportion of older workers in Korea. Policies such as labour market flexibilisation and the promotion of vocational training to support reemployment of older workers, especially female workers are becoming increasingly important.
Contact
Jiyun LEE (✉ jiyun.lee@oecd.org)
Glenda QUINTINI (✉ glenda.quintini@oecd.org)
This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Member countries of the OECD.
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The full book is available in English: OECD (2025), OECD Employment Outlook 2025: Can We Get Through the Demographic Crunch?, OECD Publishing, Paris, https://doi.org/10.1787/194a947b-en.
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