A recent report by the Bank of Korea highlighted the economic challenges young South Koreans are encountering. The study revealed that many young job seekers are struggling with extended job hunts as companies prefer experienced candidates and adopt rolling recruitment practices. This trend is exacerbated by slow economic growth in the country.
The report indicated that the longer a person remains unemployed, the lower their chances of securing a stable job in the future. For instance, individuals who are jobless for three years face a reduced probability of 56.2% in obtaining regular employment five years later. The study also found that each year without a job leads to a 6.7% decrease in real wages due to a lasting negative impact.
Similar to Japan’s past employment challenges, South Korea is witnessing a situation where young adults are grappling with increased housing costs. The shortage of affordable housing options, particularly small non-apartment units, has resulted in higher monthly rents for young individuals. This has led to a decline in housing standards for many young people in the country.
The report further highlighted the financial implications of rising housing expenses on the youth. It revealed that a 1% rise in housing costs could lead to a 0.04% reduction in total assets for individuals. Additionally, the proportion of youth debt within overall household debt surged significantly in recent years, reaching 49.6% in 2024 from 23.5% in 2012.
BOK official Lee Jae-ho emphasized that the employment and housing challenges faced by young South Koreans are structural issues that hinder the country’s long-term growth. Lee suggested that labor market reforms are necessary to address job disparities, while increasing the availability of small housing units could help alleviate housing imbalances.
