SEOUL, Dec. 9 (Korea Bizwire) — South Korea’s labor force is projected to decline 17 pct by 2040, a report showed Monday, a development that could undermine the potential growth of Asia’s fourth-largest economy.
The report of the World Trade Organization (WTO) showed that the decline of South Korea’s labor force would be the highest in the world between 2018 and 2040, compared with a 14 percent decline in both Japan and China.
The report said the U.S. labor force is projected to go up 10 percent, while the labor force of Southeast Asia could rise 16 percent during the cited period.
The report said the projections on both population and employment growth show that aging will affect some regions substantially.
“Labor force growth is also projected to become negative in the European Union and the Republic of Korea. Although population growth does not become negative in these regions, the changing age structure is projected to turn labor force growth negative,” according to the report posted on the website of the World Trade Organization.
The WTO report is the latest in a series of warnings on South Korea’s rapidly aging population amid its chronically low birthrate.
South Korea’s working-age population — those aged between 15 and 64 — could fall to 25.62 million, or 52.4 percent of the population, in 2047 from 37.57 million, or 73.2 percent, in 2017, according to Statistics Korea.
A rapid decline in working-age population could place a heavy burden on young people to support them and add a further drag on South Korea’s potential growth.
Statistics Korea forecast that the country’s population is likely to reach 39 million in 2067, sharply down from an estimated 51.7 million in 2019.
The agency said people aged 65 years or older could account for 46.5 percent of South Korea’s population, which would mark a sharp rise from 14.9 percent over the cited period.
The looming demographic decline showed that South Korea’s gross domestic product is projected to increase 65 percent by 2040, compared with the global average of 80 percent.
South Korea’s GDP growth is far behind China’s 141 percent hike and India’s 226 percent increase.
The WTO report showed that South Korea’s unskilled workers are projected to fall 51 percent — the world’s most rapid decline — by 2040.
Meanwhile, South Korea’s skilled workers are projected to increase 26 percent by 2040, compared with a 35 percent hike in the U.S., a 65 percent increase in China and a 106 percent hike in India, respectively.