NABO Population and Employment Trends & Issues (No. 2)

Published on February 25, 2025
Published by Population & StrategyAnalysis Division

■ Population & Employment Trends and Sustainable Growth
   Although the number of marriages and the marriage rate have reached their highest levels in recent years and the number of births continues to rise, suggesting a potential easing of the low fertility trend, the structural demographic change caused by natural population decline remains ongoing. As of February 2025, the number of marriages has increased YoY for eleven consecutive months; the number of births has also increased for eightconsecutive months. That being said, natural population decline, where deaths outnumber births, has persisted for 63 months in a row. As of April, the share of children/adolescents and the elderly accounted for 10.5% and 20.4% of the total population, respectively, indicating a growing trend of population aging.
   The labor market exhibits overall growth, while employment remains weak in the manufacturing and construction sectors as well as among people aged between 15 to 29. In April, the number of employed persons increased by 194,000 YoY, indicating an improvement in both the employment and unemployment rates. Employment growth varied significantly by sector and age group: the health and social welfare sector added 217,000 jobs, while the construction and manufacturing sectors shed 150,000 and 124,000 jobs, respectively. Although the employment indicators appear to be favorable overall, employment and unemployment metrics have deteriorated among the younger generation.
   Regarding sustainable growth, an analysis of trends in climate change and ecosystem protection finds that 2024 was the hottest year on record with a high degree of climate volatility. In 2023, natural disasters caused a total of KRW 958.2 billion in damages and 140 fatalities. Korea ranked 12th globally in greenhouse gas emissions (653.8 million tCO₂eq), while the country's sea levels and temperatures are rising, with the Red List Index, an indicator of the extinction risk for species, deteriorating. These trends call for greater attention to both terrestrial and marine ecosystems.

■ Issue Analysis: Economic Activity and Income Crevasse of Elderly Population
   In light of growing concerns about so-called 'income crevasse' caused by the gap between the statutory retirement age (60) and the pensionable age, an analysis was conducted on the economic activity and income crevasse of individuals aged between 55 and 70 to provide foundational data for policy discussions. The analysis finds that the elderly experience an income shortfall after pensionable age as their average monthly pension falls short of the minimum cost of living for a single-person household. A large share of the elderly population wish to continue working, but their employment opportunities are limited and wages decline with age, which appear to be another source of income shortfall at old age.
   Elderly workers retire, mostly involuntarily, from their main career job, i.e. the job they held for the longest period. Even if they are re-employed as wage workers, many work in areas that have little or no relation to their previous jobs, and the share of elderly wage workers working as low-skilled laborers increases with age. It appears that such career interruption at older age is closely related to the declining employment rate after the age of 55 as well as deteriorating wages and job quality.
    In light of these findings, a multi-faceted approach is required to help elderly workers stay in their career jobs or other related positions, allowing them to utilize their accumulated skills and knowledge.