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This report on Korea is the fourth country study published in a series of reports looking into how policies connect people with jobs, following reports on Australia, Slovenia and the United Kingdom. It has a special focus on low-income groups, jobseekers and workers, and policies geared towards closing the considerable gaps these groups are facing around income and employment support. In the past forty years, Korea has gone through a remarkable economic transformation and in the past two decades, the country has also put in place a comprehensive social protection system and a strong activation framework. Nevertheless, features of Korea’s labour market, which include very low job tenure, a high degree of duality and a high level of informality, make it difficult for some measures to reach workers and jobseekers. This report concludes that significant additional action will be needed to make income and employment supports more effective and inclusive.  

Under Action 14, countries have committed to implement a minimum standard to strengthen the effectiveness and efficiency of the mutual agreement procedure (MAP). The MAP is included in Article 25 of the OECD Model Tax Convention and commits countries to endeavour to resolve disputes related to the interpretation and application of tax treaties. The Action 14 Minimum Standard has been translated into specific terms of reference and a methodology for the peer review and monitoring process. The minimum standard is complemented by a set of best practices. The peer review process is conducted in two stages.  Stage 1 assesses countries against the terms of reference of the minimum standard according to an agreed schedule of review. Stage 2 focuses on monitoring the follow-up of any recommendations resulting from jurisdictions' stage 1 peer review report. This report reflects the outcome of the stage 1 peer review of the implementation of the Action 14 Minimum Standard by Korea.

This report, undertaken within the framework of the OECD Champion Mayors for Inclusive Growth initiative, assesses inclusive growth trends and challenges in the Seoul metropolitan area. The analysis goes beyond income to assess the barriers faced by specific groups - non-regular workers, youth, women, the elderly and migrants - across four dimensions: education, labour market, housing and the urban environment, and infrastructure and public services. The study then takes a closer look at two major policy efforts by the Seoul Metropolitan Government to advance inclusive growth. The study analyses the city’s efforts to ensure that strategies to address climate change also protect and benefit the most vulnerable populations, notably through the Promise of Seoul, which puts citizen welfare and social inclusion at the heart of the city’s efforts to tackle climate change. The study also assesses the efforts of city authorities to level the playing field for small firms and entrepreneurs through its Economic Democratisation Agenda.

Korea is often cited as a leading example of how sound economic policies can drive growth and development, blazing a trail from poverty to advanced industrialisation throughout the 1970s and 1980s. Building on its reputation as a development success, Korea now plays a highly valued role on the global stage, sharing its knowledge with others and helping to bridge the divide between developing and developed country interests. Among other issues, this review looks at how Korea shares its own impressive development experience with others and how it is dealing with key challenges in co-ordinating grants and loans across government. It also explores how Korea is expanding its aid programme to work on new priorities such as assistance to fragile and crisis-affected countries.

Skills are central to Korea’s future prosperity and the well-being of its people. The OECD Skills Strategy Diagnostic Report: Korea identifies 12 skills challenges that need to be addressed to build a more effective skills system in Korea. These challenges were identified through: 1) the OECD’s recent data and research; 2) the national data and research; 3) a diagnostic workshop 4) fact-finding interviews with key stakeholders in Korea. The report has also benefited from ongoing dialogue and consultation with a wide range of Korean stakeholders. The first nine challenges refer to specific outcomes across the three pillars of developing, activating and using skills. The next three challenges refer to the 'enabling' conditions that strengthen the overall skills system. Success in tackling these skills challenges will boost performance across the whole skills system. All of the challenges identified are strongly interlinked, and their connections with each other are identified throughout the report. Failure to look beyond policy silos will have implications for specific groups in Korea, such as youth, as well as for the economy and society’s ability to recover following the economic crisis and build a solid foundation for future prosperity.

Since joining the OECD in 1996, Korea has made impressive progress in raising living standards. Over 1996-2016, the country closed the gross domestic product (GDP) per capita gap with the OECD average by 26 percentage points. Vibrant exports underpinned strong economic growth, with Korea becoming the eighth largest exporter in the world. The country’s focus on innovation (its R&D spending is the second highest in the OECD) combined with its highly skilled population (it is among the top performers in the OECD’s Programme of International Student Assessment) supported this success. However, the convergence of Korea’s living standards to those in the most advanced countries has stalled in recent years. Output growth has slowed from 4.4% annually over 2001-10 to 2.8% since 2011. The country faces strong competition from emerging economies, notably the People’s Republic of China in low- and medium-end markets, and with advanced economies in high-end markets. This makes it more difficult for Korea to further expand its global market share.