The South Korean government will experiment with a new subsidy program to tackle youth unemployment, the Ministry of Employment and Labour announced March 18. The monthly 'youth employment promotion subsidy' of C$590 will be given to 80,000 job seekers between the ages of 18 and 34 for up to six months. This experimental measure underscores South Korea's attempt to tackle its youth unemployment problem, which has emerged as one of the key policy issues in the country in recent years.
While South Korean youth are among the most highly educated in the OECD, with 69.8 per cent with post-secondary education, they struggle with a high unemployment rate among youth. In February 2019, the youth unemployment rate was 9.3 per cent, while the overall unemployment rate was 3.7 per cent. High youth unemployment is not unique to South Korea, but there are some particularities in its labour market that justify this program. Many positions require various credentials and examinations, and South Korean youth tend to spend many months, if not years, preparing their job applications through prep courses and additional training – more so as the job market continues to become more competitive. The government, therefore, has identified a need to financially support young job seekers, especially those from low income families, during their lengthy application process periods.
The program is limited to those who have either graduated or dropped out of secondary or post-secondary education programs within the past two years. Further, only applicants who come from a family that earns less than 120 per cent of South Korea's median income (earning under C$6,540 per month for a family of four) will be eligible. The subsidy will be delivered in the form of 'clean cards' that cannot be cashed out or used for gambling, luxury items, or other purposes that do not pertain to basic living expenditures and job applications.