What did the Bank of Korea say is happening to young Koreans in the job market?

The Bank of Korea said many young job seekers are facing longer unemployment spells because companies increasingly favor experienced workers and rely more on rolling recruitment than traditional large, scheduled hiring. It linked the trend to sluggish economic growth and a scarring effect that can hurt later earnings.

How much does unemployment affect young Koreans’ future job prospects and wages?

The report said the chance of getting a regular job five years later is 66.1 percent after one year of unemployment, but only 56.2 percent after three years. It also estimated that each extra year without work lowers current real wages by 6.7 percent.

How are housing costs affecting young Koreans, according to the BOK report?

Rising rents and a shortage of small non-apartment units are worsening housing conditions for young adults who usually live in rental housing for school or work. The share living in sub-standard housing rose to 11.5 percent in 2023, and youth debt reached 49.6 percent of household debt in 2024.

Young Koreans face double strain from longer job searches, rising housing costs

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Summary

Longer job searches and rising housing costs are deepening pressure on young Koreans, according to a Bank of Korea report released Monday. The report said sluggish growth and employers’ preference for experienced workers are lengthening unemployment spells and cutting future wages. It also said higher rents and worsening housing conditions are adding strain, while BOK official Lee Jae-ho called the problems structural and urged labor and housing reforms.

Key Facts

A young person unemployed for one year has a 66.1 percent chance of securing a regular job five years later, but the probability falls to 56.2 percent after three years.
Each additional year without a job was estimated to reduce current real wages by 6.7 percent because of a lasting scarring effect.
The share of young people living in sub-standard housing rose to 11.5 percent in 2023 from 5.6 percent in 2010.
Youth debt accounted for 49.6 percent of overall household debt in 2024, up from 23.5 percent in 2012.
BOK official Lee Jae-ho said labor market reforms and a larger supply of small homes are needed to ease the pressure on young people.

By Yonhap

Published Jan 19, 2026 12:20 pm KST
Updated Jan 19, 2026 4:43 pm KST

Job seekers visit a job fair in Seoul on Dec. 2, 2025. Yonhap

Longer job searches and rising housing costs are intensifying economic pressure on young Koreans amid the country's structural challenges and sluggish growth, a central bank report said Monday.

According to a report on youth economic conditions released by the Bank of Korea (BOK), many young job seekers are experiencing prolonged job searches early in their careers as companies increasingly favor experienced workers and expand rolling recruitment, rather than the traditional large, scheduled recruiting, amid sluggish economic growth.

Those who remain unemployed for one year have a 66.1 percent chance of securing a regular job five years later, but the probability drops to 56.2 percent if unemployment lasts three years.

Each additional year without a job was estimated to reduce current real wages by 6.7 percent due to a lasting "scarring effect," the report said.

The situation mirrors Japan's so-called employment ice age generation or lost generation, which entered the labor market during the country's prolonged economic stagnation in the 1990s and early 2000s, the BOK noted.

Rising housing costs are adding to the burden.

Young adults, who typically live in rental housing for school or work, are facing markedly higher monthly rents amid a shortage of small, non-apartment units, leading to a deterioration in housing conditions.

The share of young people living in sub-standard housing rose to 11.5 percent in 2023 from 5.6 percent in 2010, according to the report.

A 1 percent increase in housing costs was estimated to reduce total assets by 0.04 percent, while the share of youth debt in overall household debt surged to 49.6 percent in 2024 from 23.5 percent in 2012, it showed.

"The employment and housing challenges facing young people are structural issues that constrain the country's long-term growth," BOK official Lee Jae-ho said. "Labor market reforms are needed to reduce job polarization, while the expansion of the supply of small homes is required to ease housing imbalances."

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