South Korea’s youth job gap is costing the economy trillions each year. A new study measured the financial impact of young Koreans who voluntarily step away from the workforce. As more educated youth rest without seeking jobs, economic losses continue to mount.
The report estimated a total loss of 53.4 trillion won in potential output over five years. Each year, the economy lost between 8.8 trillion and 11.5 trillion won. These numbers reflect the income young people could have earned if they had chosen to work. Therefore, the youth job gap has become a serious issue for the national economy.
Researchers calculated losses using average income levels of working peers. They assumed resting youth would earn about 80 percent of employed counterparts. Insurance fees were deducted before estimating annual contributions. Consequently, each year’s missed income reflected real-world salary comparisons.
The number of young people resting rose steadily. The share of 15–29-year-olds who rested grew from 4.48 percent to 5.47 percent. Compared to the general population, nearly one percent of young Koreans rested last year. Thus, the trend shows more youth leaving the labor force without clear reasons.
In addition, more graduates with advanced degrees are avoiding jobs. In 2019, around 159,000 graduates rested. By the end of the study, this figure climbed to 184,000. These highly educated individuals could have earned higher salaries but chose not to work. As a result, the South Korea youth job gap widened further.
The youth population itself also declined over the same period. It fell from 9.66 million to 8.79 million, creating more pressure on labor supply. Moreover, fewer active young workers increase the strain on industries and the economy. This demographic decline compounds the economic impact of resting youth.
Government data confirmed the seriousness of the issue. A record 421,000 young Koreans in their twenties rested during one month, the highest ever recorded. The employment rate for the 15–29 group dropped by 0.7 percent. Meanwhile, the overall population saw employment growth. Therefore, youth employment trends continue to move in the opposite direction.
Experts recommend stronger policies to address the youth job gap. They suggest expanding scholarships tied to work-study programs. Career guidance should also motivate young people to enter the workforce. Furthermore, targeted support could reduce the number of educated youth who remain outside employment.
South Korea’s youth job gap remains a challenge with long-term consequences. Without stronger measures, the country risks losing more productivity. Policymakers must act quickly to close the gap and boost economic growth.
