Despite being widely known for its rapid technological advancements and economic prowess, South Korea grapples with a deep-rooted challenge that threatens its future prosperity: youth unemployment. As the country witnesses a surge in college graduates and a shrinking availability of decent jobs, the urgency of the issue has become difficult to ignore. The current youth unemployment crisis in South Korea raises crucial questions: How can Korea effectively tackle this issue? What efforts are currently being made to address the pressing challenges faced by young job seekers? With the severity of the situation becoming increasingly apparent, it is imperative to explore potential solutions and delve into the ongoing efforts to combat youth unemployment in the nation.
Status quo of South Korea’s unemployment crisis
Youth unemployment poses a persistent challenge in South Korea, with a particularly high rate among university graduates, according to Professor Lee Joohee from the Department of Sociology.
Lee highlighted the complex nature of youth unemployment, as the statistical figures may not paint an entirely bleak picture. With a youth unemployment rate of 6.4 percent for individuals aged 15 to 29 as of April 2023, international comparisons reveal that South Korea’s rate actually falls within a reasonable range. Lee noted that the OECD average for youth unemployment, considering a narrower age range of 15 to 24, tends to exceed 10 percent, with some European countries even reaching rates of approximately 20 percent.
However, Lee emphasized that relying solely on unemployment rate statistics does not accurately capture the challenges faced by young job seekers in the country. The definitions used in surveys may lead to distorted interpretations, as they consider individuals employed if they have worked for an hour or more with the intention of earning income. Conversely, individuals are classified as unemployed only if they did not engage in income- generating work during the survey week and actively sought employment within the previous four weeks.
Lee disclosed that this disparity in definitions has two significant implications.
“Firstly, due to insufficient support for the unemployed, young people often accept even short- term and low-quality jobs, leading to potential overestimation of employment rates,” she explained. “Secondly, there is a considerable number of discouraged workers who have given up on their job search but are not counted as unemployed. Thus, the official unemployment rate fails to reflect the difficulties and frustrations experienced by young job seekers.”
Taking into consideration these fallacies of the unemployment rate, Lee suggested focusing instead on the youth employment rate, which currently stands at a mere 46 percent as of April 2023, compared to the overall employment rate of 62.7 percent for the same period, showcasing the severity of youth unemployment.
The COVID-19 pandemic and the subsequent economic downturn have significantly heightened the challenges of youth unemployment. Lee highlighted the dwindling availability of high- paying professional jobs, which leads to increased polarization in the labor market. Notably, less stable and lower-paying jobs have expanded beyond temporary or part-time positions, encompassing special employment such as freelancing and platform work, where basic labor protections are often lacking. This trend has further hindered young people’s ability to secure decent employment, exacerbating youth unemployment.
Exploring the reasons behind South Korea’s high youth unemployment rate among university graduates, Lee pointed to two key factors.
First, the country’s relatively high college enrollment rate outpaces the availability of high-quality jobs suitable for graduates. Lee attributes this issue to the dualistic structure of the economy, where large companies prefer hiring a small number of excetionally skilled regular employees, leaving numerous small and medium-sized enterprises (SMEs) with limited capacity to create attractive job opportunities for college graduates due to unfair transactions and the lower technological levels of SMEs. Additionally, the government’s financial constraints have hindered the creation of stable public sector jobs.
Finding a solution to the long- standing youth unemployment crisis remains challenging. Lee underscored the global trend of neoliberal globalization, where countries strive to reduce labor costs and enhance competitiveness. While corporations can internationalize their activities, individuals cannot easily pursue job opportunities worldwide.
“This predicament is not unique to South Korea but is a shared issue faced by many nations,” Lee warned. “With the emergence of the Fourth Industrial Revolution and the rise of artificial intelligence, the situation is expected to worsen, making it a crucial time for governments to actively step forward and exert efforts to create good job opportunities for young people.”
Yoobin Kim, a senior researcher at the Korea Labor Institute, shared his perspective on South Korea’s youth unemployment crisis.
Kim mentioned that there are a few unique characteristics to the youth unemployment situation compared to other age groups. To illustrate, the impact of COVID-19 was much more significant to the youth population at the beginning of 2020. In the case of the range of reduction of employment, half of the people who lost their jobs were in their late teens or twenties.
As of the present, the youth unemployment rate is recovering quickly, but this is not simply good news.
“Since the pandemic is not completely over, employers prefer to hire people who are easier to let go, namely short- term or temporary employees,” Kim explained. “In other words, uncertainty about the future in the labor market leads companies to favor workers with little or no guarantee of work and wage stability.”
Lastly, Kim mentioned the “glass ceiling” as the reason why the ongoing youth unemployment crisis is such a complex problem to tackle. The glass ceiling refers to the phenomenon in which it is very difficult, if not impossible, to move from a job with poor working conditions to occupations that are well-respected.
Considering the fact that South Korea is a country with a relatively wide gap among jobs in terms of wages, working hours, and insurance, the young, especially those who graduated from university, are reluctant to work at places below their expectations.
“The youth unemployment crisis cannot be fixed through policies that deal with only the youth unemployment rate. The overall labor market structure must change,” Kim concluded.
Special contract departments relieve the burden of employment
While the unemployment of college graduates continues to raise concerns, South Korea has begun to implement the concept of employment-ensured special contract departments, guaranteeing direct post-graduation employment through agreements with industries or state agencies.
As of 2023, South Korean universities have reported a total of 12 employment-ensured type special contract departments in eight differentuniversities.
One of the first special contract departments to be established was the Department of Semiconductor Display Engineering at Sungkyunkwan University. Founded in 2006 with Samsung, the program aims to train world- class semiconductor specialists with creative and practical skills based on the bold investments from the company, including internships and lectures by Ph.D. researchers. Students also receive the benefit of joining Samsung Electronics or Samsung Display after graduation.
Following this trend, Korea University has opened the most contract departments as of 2023, including the Department of Cyber Defense, Department of Semiconductor Engineering, School of Smart Mobility, and Department of Communications Engineering.
Yun Junsang, a freshman at Korea University School of Smart Mobility, introduced his major and shared the experience from his first semester.
Yun explained that Korea University School of Smart Mobility, a contract department between Hyundai Motor Company and Korea University, is South Korea’s first employment-ensured master’s integrated course. The school is a technology department specializing in the national core industry, where students can choose either next- generation energy or future mobility as their major.
With the goal of training world-class smart mobility engineering leaders in entrepreneurship and creative convergence capabilities, the school guarantees students’ employment opportunities at Hyundai Motor Company. At the end of their sophomore year, students confirm their employment through job interviews and join the company after completing their master’s course for another three years.
“I applied for the department without hesitation, as I have been interested in the field of autonomous driving since high school,” Yun said. “I believe the school provides an environment where students can focus on studying their field of interest with full support by Hyundai Motor Company.”
When asked about the advantages and disadvantages of his department, Yun explained that the biggest asset is, of course, the contractual relationship with Hyundai Motor Company. Yoon believes that it is a great advantage to experience the many opportunities that are umcommon for ordinary undergraduates.
However, Yun also expressed concerns about the fact that there is not much set in stone within the course, as his department was newly established in 2023. There was a great deal of confusion, especially at the start of the semester, because the students were in the process of creating their student-led communities from scratch. They are also anxious about the fact that the curriculum can be flexibly adjusted, while there are some concerns among students from the department that they have limited their career options by committing only to their future employer.
“Despite these concerns, I believe students of our department are able to gain more experience in various fields without the burden of employment,” Yun stated. “More specific and diverse study opportunities are given in connection with Hyundai Motor Company, and I also wish to continue my studies in the field of autonomous driving through an overseas Ph.D. program.”
Yonsei University also established its Department of Integrated Display Engineering in 2023 as the university’s new employment-ensured special contract department. Harin Park introduced her major and shared some thoughts on her first semester as a freshman in the program.
Park explained that Yonsei University Department of Integrated Display Engineering, a contract department between LG Display and Yonsei University, is an engineering department specializing in a wide range of areas related to display, including display devices, materials, circuits, and designs.
“I decided to join with the thought that display is an important field to lead the Fourth Industrial Revolution,” Park said. “Also, as the department ensures employment, I applied with the expectation that I would be able to get more than enough support for studying.”
Park emphasized some benefits of her department that comes with the contract relationship with a leading company in the industry. Students have no tuition burden thanks to the four-year scholarship system, with admission and dormitory fees also provided for freshmen. In addition, students selected for the industry-academic scholarship after their sophomore year are provided with additional tuition subsidies.
Park muses that having a confirmed future position at one of the leading domestic companies during a period of employment recession itself was a great advantage, and there was no reason to hesitate over enrollment thanks to the additional support for her studies and extracurricular activities.
“I believe these contract departments, of course, have a great advantage in terms of employment,” Park said. “However, as there is a ‘prior-set path’ for most of the students, there may be difficulties for those who realize that the field does not fit their interests afterwards.”
How is employment supported by universities?
Recognizing the impact of youth unemployment, particularly among college graduates, universities are attempting proactive measures to enhance support systems and initiatives aimed at assisting undergraduate students during their transition into the workforce.
Since its establishment, Ewha Career Development Center (CDC) has been implementing and operating long-term development plans with success. It offers a range of job support services and specialized counseling tailored to the characteristics of each department and major. Additionally, it has established a strong industry-academia cooperation network to support the successful social advancement of Ewha students, as well as various mentor-mentee programs to strengthen bonds between alumni and current students.
Recently, the institute has been operating special programs to support not only corporate but also various field expansions, including global internships, overseas employment enhancement, and national certification preparation classes.
In an effort to support women’s professional advancement in accounting, Ewha's School of Business has been offering the Certified Public Accountant (CPA) program since the 1990s. Led by Professor Sewon Kwon from the School of Business, the program has become a renowned platform for nurturing successful female accountants and has experienced a surge in the number of candidates passing the CPA exam.
“If the number of Ewha’s successful candidates increases, the overall proportion of female candidates nationwide also rises,” Kwon stated with pride.
In 2022, the program achieved a record-breaking number of 49 successful candidates, contributing significantly to the overall increase in the percentage of female candidates passing the CPA exam, which reached 35.2 percent.
The admission process for the CPA program involves an entrance examination held at the beginning of each semester, with additional recruitment during summer and winter if vacancies exist. However, candidates who have already passed the first level of the CPA exam are exempt from the entrance examination and automatically eligible for admission. Kwon explained that the growing popularity of the profession has led to intensified competition for admission, reflecting the increasing number of applicants.
Kwon introduced the various initiatives the CPA program offers to provide comprehensive support to its students. Students are allocated personal seats and lockers at the Ewha-Shinsegae Building’s accounting study center. Financial assistance is provided for online lecture fees and textbook purchases. Additionally, students have access to guest lectures and mentoring opportunities with experienced CPAs, enhancing their professional development.
Recognizing the importance of a supportive environment, students in the program are given priority for on-campus housing, ensuring a close-knit community and convenient access to resources. Furthermore, the program offers the CPA Encouragement Scholarship to selected students eachsemester, providing financial support and motivation for their academic journey.
The academic outcomes of the CPA program at Ewha Womans University have shown continuous improvement over the years, according to data provided by Kwon. The number of students passing the CPA exam has steadily increased, demonstrating their performance and dedication. The output has steadily increased since the record of 27 students in 2018, with 49 students in 2022.
With a goal to further enhance these achievements, the program has set an ambitious target of reaching 60 successful candidates this year.
“In light of the challenging job market and the difficulties many students face in finding employment, I encourage students to consider the CPA profession as a rewarding career path,” Kwon said. “The CPA program equips students with the necessary knowledge and skills to excel in the accounting, finance, and corporate consulting sectors, offering diverse opportunities for professional growth.”
Universities play a vital role in equipping college graduates with the necessary knowledge, skills, and confidence for career success. By prioritizing students’ needs and fostering a supportive environment, these schools could contribute to a positive future in a competitive job market.