home Publications


Industrial Trends & Issues

Title NABO Industry Trends and Issues (No. 11)

  • Views
  • Date

NABO Industry Trends and Issues (No. 11)

30 August 2018
Industry & Employment Analysis Division of the Economic Analysis Bureau


I. Employment, Population, Pension Trends
 (Employment) The number of employed people in July 2018 was 27 million 83 thousand, which is five thousand (0.0%) more than the same period of the previous year; and the number of employed youths (between ages 15 and 29) decreased by 47 thousand (-1.2%). While the number of employed in the manufacturing sector decreased by 0.3%p yoy to 61.3%, the unemployment rate was 3.7%, an increase of 0.3%p yoy.
 (Population) As of November 2017, there are 20.17 million households in Korea, which is 330 thousand (1.7%) more than 19.84 million households in 2016. The number of single-person households  is highest, representing 28.6%, and this proportion is expected to increase to 36.3% by 2045. Those who are 70 years and older account for the biggest proportion (18.0%) of the single-person households, and the relative poverty rate of single-person households is 50.5% as of 2016, which is relatively higher than the total average (15.9%).
 (Pension) The number of subscribers to the National Pension Service in the 1st quarter of 2018 is 21.8 million which is 0.2% higher than the same period of the previous year, and the reserves total 625.9 trillion won, 9.8% higher than the same period of the previous year. There are 129 thousand business subscribers to the Defined Benefit Retirement Pension, up 3.2% from the same period of the previous year, and the number of accounts of Defined Contribution Retirement Pension subscribers is 3 million 43 thousand, an increase of 13.1% over the same period of the previous year. The retirement pension reserve is 169 trillion won, which is 14.6% higher than the same period of the previous year.


Ⅱ. Analysis of the Income Gap and Poverty Risk of Self-employed Households and Salary and Wage Earners’ Households
Although the self-employed population of Korea has been steadily decreasing, it is still significant (25.5%) compared to the OECD average (16.4%). The income gap between self-employed households and salary and wage earners’ households has been increasing excessively since the Asian Financial Crisis (1998). Analysis reveals that the income gap occurs as the occupations of households heads who are between ages 50 to 64 are concentrated in sectors such as wholesale and retail, hospitality, food & beverage, transportation, at a time when the income generation ability of traditional self-employed sectors such as wholesale and retail is weakening. As an attribute of self-employed households facing the risk of poverty (under 50% of the median income), if the head of household is between 50 and 64 years old and he or she is working in a field that is traditionally self-employed, the risk of poverty increases. Therefore, it is necessary to review ways to improve the business environment for the self-employed and job quality as well as review ways to create and enhance the quality of salary and wage earning jobs that small-scale self-employed people can access.


Ⅲ. Profitability and Sustainability Analysis of Domestic Listed Companies
An analysis of the profitability and profit sustainability of domestic listed companies showed that it is necessary to develop a strategy focusing on enhancing either profitability itself or profit sustainability, on a case-by-case basis, depending on company size and the relevant industry. The revenue to operating profit ratio of domestic listed companies has averaged 4.9% to 7.7% since 2010, and the top 100 companies in terms of revenue showed a lower level of profitability compared to the average of the all listed companies. Meanwhile, a measurement of the profit sustainability of domestic listed companies showed that companies with lower revenue exhibit lower profit sustainability compared to those with higher revenue volume; and while the profit quality of the manufacturing sector or printing and broadcasting services sector is high, the profit quality of the wholesale, retail and transportation sectors is low. Companies with low profitability compared to revenue need to enhance efficiency by seeking profit sources from high value-added products or by innovating the cost structure of their sales activities; whereas companies with low profit sustainability need to selectively pursue strategies to increase sustainable profits rather than boosting profitability itself.


Ⅳ. The Relationship between Childcare Facilities and Intention to Have an Additional Child
Support for childcare facilities has been enhanced as part of efforts to resolve Korea’s low-birth rate involving parents intent on having a second child, and this has led to a significant increase of childcare facilities including private and home-operated nurseries. However, a gap exists between districts, provinces and cities as to the status of the childcare facilities. Upon analyzing the relationship between childcare facilities and the intent to have an additional child, it appeared that there is a positive(+) relationship between the supply of childcare facilities such as public nurseries and the decision to have an additional child. Therefore, when establishing policies related to childcare facilities, overall measures to establish such facilities must be developed by taking into consideration the current status of the city, province and district-level childcare facilities and their fiscal conditions.

faceboock top