Korea Lags Behind in Graduate Employment

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Korea lags behind other wealthy countries in terms of the employment rate for university graduates, a report suggests. Many well-educated young Koreans who could be the most productive and creative workers are unemployed and lost to the economy.

The Korea Economic Research Institute analyzed graduate employment among people aged 25-34 in OECD member countries and found that it stands at just 75.2 percent in Korea, far lower than the OECD average of 82.9 percent.

Korea ranks 31st among 37 OECD members and pales compared to advanced countries such as the U.K. (90.6 percent), Germany (88.4 percent), France (85.2 percent), and the U.S. (84.2 percent).

The picture looks worse still when looking at the proportion of the economically inactive population taken up by young graduates, where Korea’s is the third highest at a whopping 20.3 percent. Then economically inactive population are people who are neither employed nor in training and have given up looking for work.

A major reason for graduate unemployment is a mismatch between their majors and job openings — in other words they studied the wrong subject.

People look around a job fair in Seoul on Tuesday. /Newsis

According to Statistics Korea, the mismatch rate stands at over half or 52.3 percent. The blame is being put on the inability of Korea’s universities to adapt to the rapidly changing demands of businesses.

“Stanford University’s computer engineering department more than quintupled its student numbers from 141 in 2008 to 745 last year, but the same department at Seoul National University increased the number merely from 55 to 70,” said Choo Kwang-ho at KERI. “We need to reduce the mismatch between majors and jobs and make the most of highly educated human resources by easing caps on student numbers and improving universities’ competitiveness.”

But another reason is that quality jobs have not increased in line with the number of young people who go into higher education rather than vocational training.

Korea ranks top in the OECD in the proportion of young people with university degrees at 69.8 percent, but there is simply no enough demand for them in many fields, KERI pointed out. The number of university graduates increased three percent on annual average from 2013 to 2020, compared to a mere 1.3 percent increase in the number of jobs that need highly educated workers.

Changes in the industrial structure also plays a part as technologies and automation have reduced the need for human workers, while the rigid labor market makes companies reluctant to hire workers on a permanent basis.

“The labor market makes layoffs difficult, hamstrings recruitment and prevents young people from joining the workforce,” said Choi Joon-sun at Sungkyunkwan University. “We need to improve labor market flexibility, which makes it easy for businesses to hire more people.”

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