Seoul, Jan 19 (IANS) Longer job searches and rising housing costs are intensifying economic pressure on young South Koreans amid the country’s structural challenges and sluggish growth, a central bank report said on Monday.
According to a report on youth economic conditions released by the Bank of Korea (BOK), many young job seekers are experiencing prolonged job searches early in their careers as companies increasingly favour experienced workers and expand rolling recruitment, rather than the traditional large, scheduled recruiting, amid sluggish economic growth.
Those who remain unemployed for one year have a 66.1 per cent chance of securing a regular job five years later, but the probability drops to 56.2 per cent if unemployment lasts three years, reports Yonhap news agency.
Each additional year without a job was estimated to reduce current real wages by 6.7 per cent due to a lasting “scarring effect,” the report said.
The situation mirrors Japan’s so-called employment ice age generation or lost generation, which entered the labour market during the country’s prolonged economic stagnation in the 1990s and early 2000s, the BOK noted.
Young adults, who typically live in rental housing for school or work, are facing markedly higher monthly rents amid a shortage of small, non-apartment units, leading to a deterioration in housing conditions.
The share of young people living in sub-standard housing rose to 11.5 per cent in 2023 from 5.6 per cent in 2010, according to the report.
A 1 per cent increase in housing costs was estimated to reduce total assets by 0.04 per cent, while the share of youth debt in overall household debt surged to 49.6 per cent in 2024 from 23.5 per cent in 2012, it showed.
“The employment and housing challenges facing young people are structural issues that constrain the country’s long-term growth,” BOK official Lee Jae-ho said. “Labor market reforms are needed to reduce job polarisation, while the expansion of the supply of small homes is required to ease housing imbalances.”
—IANS
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