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연구보고서
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대외경제정책연구원 [KIEP] KIEP Opinions Opinions 제161권
발행연도
2019.5
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초록· 키워드

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Employment is currently the hottest topic in Korea. Changes in monthly employment from the previous year show a downward trend since the Moon administration took office in May 2017. This resulted in a rising trend in unemployment rate during the same period, with the latest data (for April 2019) recording 4.4%, a 0.2 percentage point rise compared to the month before President Moon's inauguration. Critiques see this as evidence that the government's strategy of income-led growth is backfiring. They claim that the line of policies for income-led growth, particularly the rapid increase of minimum wage, are to blame for the sluggish employment and rising unemployment. Whether the income-led growth strategy backfired and caused the sluggish employment is a question that requires careful counter-factual analysis. Looking at sectoral employment, however, the data suggests that the overall employment would have been much worse without the expansion in the public and social services sector which is also a part of the income-led growth strategy. Employment in public and social services has been rapidly rising in the current government, from less than 4.9 mil-lion in May 2017 to more than 5.1 million in April 2019, while the other sectors combined showed a slightly declining trend during the same period. The Moon administration's goal is to create 340 thousand jobs in public and social services during its mandate, to improve the scope, quantity and quality of these services. Last year, KIEP argued that the size of Korea's employment in public and social services is too low compared with other OECD countries. In 2017, for instance, Korea's employment in this sector was 72 per 1,000 inhabitants, near the bottom of the OECD countries, together with Bulgaria (78) and Romania (62). Also, Korea is located far below the regression line of this measure against income level and age distribution. Considering public and social services "normal" – for which demand increases as income rises – Korea's meager size of employment in this sector suggests that the government's drive to expand employment in this sector is likely to be welfare-improving. Among the areas within public and social services, Korea particularly lacks social workers and health workers. With rising income level and shifts in age distribution, demands are also likely to rapidly increase in these areas. In this regard, the government is rightly focusing on these areas. Also, as KIEP pointed out last year, access to medical service varies significantly across regions in Korea: urban areas not only have more health workers but also have more health workers per inhabitant. Probably in recognition of this divergence, the Moon administration's policy priorities include improving access to medical service in rural areas.

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