I. Employment, Population and Insurance Trends
(Employment Trends) The number of employed people in April 2018 was 26.868 million, which is 0.5%(124 thousand) more than the same period of the previous year, which was 26.744 million. However, the portion of employed youths decreased by 1.7%(68 thousand), from the 3.918 million in the same period of the previous year. While the scale of employment in the manufacturing sector was reduced by 1.5%, the performance of service sector rose 0.5% due to increased employment by organizations related to public administration and national defense.
(Population Trends) The economically active population (ages 15 to 64) as of April 2018 was 37.6 million, 130 thousand less (-0.35%) than the same month of the previous year, due to the reduced population of children and young teens (ages 0 to 14) as well as the increased senior population (65 and older). In particular, the aging index was over 140 in regions such as Jeonnam, Gyeongbuk, Gangwon, Jeonbuk and Busan.
(Insurance Trends) Due to the lower life insurance savings rate and reduced premium income from retirement pension insurance, life insurance and non-life insurance premium income for the 4th quarter of 2017 was 58.7 trillion won, 1.6% lower than the same period of the previous year. In 2017, the premium income and insurance payments for medical insurance based on actual medical expenses were 7.4 trillion won and 7.6 trillion won, respectively, both higher than the previous year (by 15.4%, 8.5%).
II. Analysis of the Operational Efficiency of the Water Supply System—Focusing on Local Waterworks
Since the water supply system is divided into the metropolitan waterworks and local waterworks, there has been criticism about the declining operation ratio due to overlapping facilities and the operational inefficiency of the local waterworks. Therefore, a nationwide Data Envelopment Analysis (DEA) was conducted on 152 local waterworks operators. As a result, multi-regional operation of real waterworkers proved to improve operational inefficiency, making it possible to contribute to cost cutting and higher service quality. Outsourcing the operation of local waterworks resulted in some achievements such as higher Accounted Water Rates. However, a more thorough analysis of outcomes needs to be conducted to determine its contribution to the enhancement of overall efficiency.
III. Analysis of the Impact of International Oil Price Changes on Korean Industries
International crude oil prices in the 1st quarter of 2018 increased by 22% yoy to 64.6 dollars/barrel, marking the highest price peak since 2014. The recent rise of international oil prices stems from recent development such as the US’ withdrawal from the Iran nuclear deal, the discussion among the Organization of Petroleum Exporting Countries on production cuts as well as strong demand for oil. Because oil prices are positively correlated with the national Producer Price Index, an oil price increase may lead to increased production costs for domestic industries. Therefore, this report analyzed the price spillover effect by using the input-output table published by the Bank of Korea. According to the results, a 10% price increase of imported crude oil incurs a 0.57% upward rise on all industry prices in Korea. By sector, the highest price spillover effect seems to be on petroleum products and land transportation services.
Ⅳ. Analysis of the Cause of Increased Medical Expenses in OECD Countries
Although national medical expenses in Korea are below the OECD average (9.0%) as of 2016, at 7.7% to GDP, the increase rate of medical expenses from 2000 to 2016 was 3.2%p, surpassed only by the US (4.7%p). Upon analysis of the cause of the increased medical expenses, factors such as per-capita national income and population aged 65 or older, the expansion of health insurance coverage and health risk factors such as alcohol usage appeared to have an influence on the trend. In order for the Korean medical welfare system to be sustainable, it is necessary to conduct a systematic selection of essential medical services, encourage the appropriate utilization of medical services, provide education on healthy lifestyle habits and provide preventive medical services.