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Korea’s labour supply to peak in 2021
Publication Date : 18-03-2013
South Korea's working-age population is expected to fall after peaking in 2021, a state-run think tank said on Sunday.
South Korea's labour force participation rate, an indicator for the size of the working-age population of an economy, is forecast to hit a record high of 61.6 per cent before falling steadily, the Korea Development Institute said. It added the rate was likely to fall to the 50 per cent range in 2030, which means Korea will face a shortage of labour.
An aging population and low birth rate are the main reasons for the falling population of economically active workers, KDI said. Some data has shown 39 per cent of the nation’s population is expected to be over 60, compared with the current 17 per cent.
In an attempt to cope with the labour shortage, the think tank called for an extension of the retirement age, currently now 60, by adopting a salary peak system, which gradually reduces wages of workers after reaching a certain age in return for guaranteeing more years of employment.