The employment structure of Korea has undergone remarkable changes since the beginning of industrialization in the early 1960s. In 1960, workers engaged in the agricultural, forestry and fishery sectors accounted for 63 percent of the total labor force. However, this figure dropped to 7.9 percent in 2005. By contrast, the share of the tertiary industry (service sectors) grew from 28.3 percent of the total labor force in 1960 to 73.5 percent in 2005.

Composition of Labor Force by Industry

In the latter half of the 1970s, the Korean labor market went through a series of important changes. Korea emerged as a competitive country in the global market with its labor-intensive industries such as textiles and footwear. In the 1970s and 1980s, the government focused on the labor supply and training in response to economic growth. The cultivation of skilled workforce and provision of job placement services for low-skilled workers were major policy pursuits to ease labor shortages resulting from industrialization. From the latter half of the 1980s, however, the emphasis on quantitative growth caused inequality between classes and regions to loom as a problem. The policy emphasis thus shifted to promoting welfare and enhancing equality, which led to the legislation of the Minimum Wage Act (1986), the Equal Employment Act (1987) and the Act on Employment Promotion and Vocational Rehabilitation for the Disabled (1990) as well as other measures.

In the early 1990s, in order to systematically cope with unemployment problems caused by a slowdown in economic growth, the Government passed several major laws, including the Employment Insurance Act (1993), the Basic Employment Policy Act (1995) and the Vocational Training Promotion Act (1997), setting a foundation for employment policies.


During the financial crisis caused by the foreign exchange shortage in 1997, employment problems worsened with the unemployment rate temporarily soaring to the range of 8 percent. In response, the Tripartite Commission, launched in 1998 and composed of representatives from labor, management and the government, cooperated to reach the Social Compromise to Overcome the Economic Crisis in Korea. By doing so, all three parties were able to share the efforts and pain of overcoming the crisis. In addition to carrying out government-wide countermeasures against massive unemployment, the government greatly expanded the employment infrastructure by building more job centers. In October 1999, the government also strengthened the social safety net to cope with unemployment by extending the coverage of employment insurance to all workers, including part-time and temporary workers.

In response to the rapidly changing employment environment of low growth and low employment, the government has actively pursued policies aimed at creating more jobs as well as easing unemployment since the launch of the Participatory Government of President Roh Moo-hyun. In addition to intensively fostering growth-engine industries, the administration has been trying to make institutional improvements by alleviating regulations to create more social service jobs. By reducing working hours and newly establishing a system of providing subsidies for introducing a shift work system, the government increased efforts to create more jobs through job-sharing.

Various efforts are being made to improve employment support services. For instance, services aimed at specific vulnerable groups, such as the YES program for young people, "Restart" for the homeless, etc. have been developed.

Individual Action Plans (IAPs) for recipients of unemployment benefits have been expanded to cover both young people and the elderly as a means of encouraging them to look for jobs more actively.

Also, in response to growing demands for lifelong competency development, the government has gradually expanded investment in vocational training. In reaction to the trend of low fertility and an aging labor force, various measures have been implemented to increase the employment rate of women. They in-clude such measures as easing discrimination in employment and supporting reconciliation between work and family life as well as tackling the problem of career breaks caused by pregnancy and childbirth. A variety of other measures have been implemented to expand and stabilize the employment of the elderly, such as extending the retirement age, reforming wage systems and reducing discrimination and prejudice based on age.