OECD ECONOMIC SURVEY OF KOREA
Addressing low fertility
Sejong, 11 July 2024
oe.cd/KOR
@OECDeconomy
Source: OECD Economic Outlook database.
Reducing risks from trade concentration remains
A. Exports by destination, 2023
Source: Korea Customs Service.
B. Exports by product type, 2023
Growth is projected to resume after a soft patch
Source: OECD Economic Outlook Database.
Spending restraint in line with the fiscal rule is needed
General government fiscal balance
Fiscal balance (% of GDP)
Structural balance (% of potential GDP)
Note: The structural balance is the fiscal balance adjusted for the economic cycle and one-off events.
Source: OECD (2023), Economic Outlook 115 (database), updated with recent data releases.
Boosting small and mediumsized enterprise productivity
Productivity needs to improve to counteract low fertility
%-points
Contributions to per capita GDP growth
Projections →
Labour supply
Capital per worker
Labour efficiency
GDP per capita (%)
Note: The methodology is explained in Chalaux and Guillemette (2019).
Source: OECD, Economic Outlook database.
Productivity catch-up of small firms would boost incomes
Value added per employee in small and medium-sized enterprises relative to large firms, 2020
Source: OECD Structural and Demographic Business Statistics (ISIC Rev. 4) (database).
Legal or institutional limits to small and medium-sized enterprise subsidies could improve a fragmented system
Number of programmes subsidising small- and medium-sized enterprises
Source: Ministry of SMEs and Startups.
Reducing state involvement and barriers to firm entry and trade could boost competition
Selected product market regulation sub-indicators (2023)
Source:
Responding to low fertility and population ageing
Addressing labour market dualism could strengthen prospective parents’ finances
Containing housing and education expenses could reduce hurdles to have children
Total Seoul Metropolitan Area
Source: Statistics Korea.
More public and workplace childcare and better private childcare would meet parents’ demand
1. Compiled from an interview survey of 1 000 households with infants and toddlers attending daycare centres. The satisfaction level for each type of daycare centre ranges from 0 to 5.
Source: Ministry of Health and Welfare (2022), Childcare User Satisfaction Survey.
Increasing parental leave usage will help improve work-family balance
Individuals having used any parental leave per 100 births in 20211
Women Men
1. Or latest available year. Observations above 100 reflects that depending on the total leave entitlement and the flexibility in taking up leave both parents can take leave in multiple years for each child born, for example in multiple batches and/or on a part-time basis.
Tackling workplace discrimination can reduce gender gaps
Gender
Note: Difference between median earnings of
Source: OECD (2024), Gender wage gap (indicator).
and women relative to median
Extending working lives would improve the public finances
reform baseline + Increasing elderly employment + Postponing retirement + Increasing youth and female employment and immigration
Note: The following reforms are assumed: a) increasing elderly employment by 1/3 of the difference with the previous age group by 2040; b) raising the legal retirement age to 68 by 2035 and adjusting it thereafter by two thirds of life expectancy gains; c) increasing the youth employment rate to the current OECD average, female employment rates to male employment rates, and the net annual immigration inflow from the current
to
000 by 2040. The scenarios are cumulative.
A more welcoming immigration regime could unlock valuable labour resources
Foreign-born population, 2022¹
1. Data refer to 2022 or the most recent available year. For Japan and Korea, the data refer to the foreign population rather than the foreign-born population. The foreign-born population relates to where individuals were born, while the foreign population relates to their citizenship or nationality status.
Source: OECD International Migration Database.
Reducing greenhouse gas emissions
Emissions need to fall faster to reach targets
Note: Total greenhouse gas emissions include land use, land use change and forestry.
Source: OECD, Air and climate (database).
Reducing emissions trading scheme allocations is key to lower industry and energy emissions
Emissions by sector, official scenarios
Note: CCUS stands for carbon capture, utilization and storage.
Source: The Presidential Committee on Carbon Neutrality and Green Growth (2023), First basic plan for carbon neutrality and green growth.
Market-based pricing would help decarbonise energy supply and reduce energy consumption
Source: Korea Energy Economics Institute; OECD-International Energy Agency, Energy Prices and Taxes Statistics Database. Electricity prices, 2022
Share of survey respondents supporting a policy or combination of policies in Korea
infrastructures (e.g.
Source: Dechezleprêtre et al. (2022).
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