SEOUL, Dec. 23 (Korea Bizwire) — The number of South Koreans overqualified for their current jobs has reached a record high of over 30 percent this year, a central bank report showed Monday, suggesting overeducation may be adding to the country’s overall costs and that the nation may also be running out of quality jobs.
According to the report from the Bank of Korea (BOK), the number of people underemployed has breached the 30 percent mark for the very first time this year.
“Underemployment occurs when a worker has higher acquired education than required education for one’s job. In the long run, such a mismatch between required and acquired education is related to the inefficiency of investment in education and human resources due to overeducation,” the report said.
“Also in the short term, it provides information about the quality of jobs that traditional employment-related indicators, such as jobless rate and employment rate, may not be able to provide,” it added.
The report listed the lack of quality jobs as the No. 1 reason for a steady rise in underemployment.
For instance, the underemployment rate surged shortly after the 2008 global financial crisis, breaching the 25 percent mark for the first time in history.
“Such an increase shows a structural imbalance between supply and demand in the labor market where the increase in the number of jobs that require higher education falls short of the rise in the number of college graduates,” the report said.
In the 2000-2018 period, the number of college graduates increased by an annual average of 4.3 percent, it noted.
The number of what it called “adequate jobs,” on the other hand, gained only 2.8 percent per year over the cited period.
The report said the country’s job ladder may also not be operating properly, noting 85.6 percent of those underemployed continued to remain underemployed after a year, and 76.1 percent even after three years.
Only 4.6 percent moved up the ladder to find “adequate jobs” after a year and 11.1 percent after three years, while 9.8 percent and 12.9 percent simply became unemployed after a year and three years, respectively.
“There is a need to enhance job training while working to reduce overeducation since an increase in underemployment leads to a rise in inefficiency and costs. Also, there need to be efforts to enhance labor mobility in the job market,” the report said.