Korea should boost support for laid-off workers


02/05/2013 - 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.


Back to Work: Korea says that Korea has avoided the worst effects of the economic crisis, with the unemployment rate back to its pre-crisis level of 3%.


But more efforts need to be made to help the many workers who lose their jobs each year when their company goes bankrupt or downsizes, especially older workers and the low-skilled. In Korea, this affects between 2.5% and 5% of workers aged 20-64 years old each year. The rate is slightly higher among women (3.8%) than men (3.2%).


Finding a new job can take time as only less than half of laid off workers find another job within one year. Older workers, the least qualified and those in small firms are at most risk of being laid-off and staying unemployed for a long time afterwards.


 Over two-thirds of laid-off workers find work in the same occupation as before or in occupations using similar skills. Nevertheless, earnings tend to be lower in the new job. Laid-off workers who are back in work within a year experience a 4% fall in real monthly wages on average and a 10% fall in real annual gross income. They are also less likely to have regular contracts on their new job and get fewer benefits.


To address these challenges, the OECD recommends that Korea:


  • Boost staffing levels in MOEL Job Centers so that more time can be spent providing tailored assistance to the unemployed.
  • Provide more intensive support to jobseekers who have been out of work for six months or more.
  • Focus vocational training programmes on generic skills required by emerging industries, such as maths and interpersonal skills.
  • Monitor and evaluate the impact of job-search assistance and training to identify the most effective programmes.
  • Improve compliance rates for Employment Insurance among businesses.
  • Consider easing access to Basic Livelihood Security for low-income laid off workers who do not qualify for unemployment benefits and risk falling into poverty.


For further information or comment, journalists should contact Paul Swaim, of the OECD’s Employment, Labour and Social Affairs directorate – tel. + 33 1 45 24 19 77.

 The report is available here or on request to [email protected]


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