August 5, 2011

KOREA: Korea faces labour shortage, low productivity

SINGAPORE / The Straits Times / Asia / August 5, 2011

THE FAST-AGING population will bring labour shortages and low productivity to the country in the next couple decades, a report said on Wednesday.

Korea's dwindling workforce, coupled with rock-bottom fertility rates and prolonged longevity, may weaken economic growth after 2020, said Park Chan Young, a research fellow at Samsung Economic Research Institute, a leading private think-tank. 'The government needs to come up with strategies to minimise the side effects of aging in the labour market from now onwards,' he said in the paper.

Korea is one of the world's fastest aging countries.

THE FAST-AGING population will bring labour shortages and low productivity to the country in the next couple decades, a report said on Wednesday. -- ST PHOTO: DESMOND LIM

According to the Korea Institute of Finance, Korea will become the world's most aged society by 2050, and people aged 65 or older are likely to make up 38.2 per cent of the total population, more than tripled compared with 11 per cent last year.

The country's birthrate is 1.22, the lowest among members of the Organisation for Economic Cooperation and Development. But the growth rate of its life expectancy is 18.4 per cent, one of the highest. The Word Bank estimated the average life expectancy of Koreans at 83.5, compared with 82.6 of Japan, 81.5 of France and 78.4 of the U.S.

Mr Park projected the economically active population, which stood at 25.82 in 2010, to hit the peak of 26.81 million in 2018 and drop to 24.58 million by 2030. Such figures have been building concerns over a weak safety net for the elderly and shrinking labour force. -- THE KOREA HERALD/ASIA NEWS NETWORK

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