Young Men's Labor Force Participation Rate Drops 7.6 P.P. in OECD

Last year, the labor force participation rate for young men aged 25-34 fell by 7.6 percentage points compared to 2000, marking the fastest decline among OECD countries and indicating deepening economic difficulties for young men in our society.

The Bank of Korea's Research Department Employment Research Team, in a report, identified an increase in labor supply from highly educated women as a key factor behind the decline in young men's labor force participation. Men born between 1991-1995 with a four-year university degree or higher saw their labor force participation rate drop by 15.7 percentage points compared to men born between 1961-1970 with the same educational background, while women with the same education level saw a 10.1 percentage point increase. The number of female employees in professional and clerical occupations has reportedly reached a similar level to men.

Changes in employment structure due to industrial shifts, an aging population, and the spread of AI were also cited as contributing factors to the decline in young men's economic activity. The 2.6 percentage point drop in labor supply probability for men with an associate's degree or lower compared to 2000 is attributed to the decrease in mid-to-low skill jobs in manufacturing and construction. The increasing employment rate of older individuals has reduced the proportion of young people in higher-skilled jobs, and industries highly exposed to AI have seen a reduction of 251,000 jobs over the past four years.

The research team analyzed that efforts are needed to create institutional conditions that facilitate easier entry into the labor market for young people, to ensure that intensified competition between genders and generations leads to improved labor market efficiency.