Anne Lauringson
Marius Lüske
OECD
Anne Lauringson
Marius Lüske
OECD
Korea has a solid system in place of active labour market policy (ALMP) provision. In addition, Korea has increased the resources allocated to ALMPs, with an emphasis on assisting groups facing labour market barriers. To further strengthen the quality of this support, Korea could diversify its ALMP offer, enhance co‑operation among Employment Welfare Plus Centres’ staff to ensure comprehensive service provision, and further reinforce jobseeker counselling and services to employers. Driven by a comprehensive strategic approach to digitalisation, digital employment services have become an integral part of employment services in Korea, often using innovative state‑of-the‑art technologies. To progress further on this successful pathway, clearer frameworks should be established to manage risks associated with advanced technologies and ensure that no jobseekers are left behind. ALMPs and digital solutions for employment services need to be monitored and evaluated rigorously and systematically.
Korea’s labour market performs well in terms of employment rates and unemployment, but faces structural challenges, notably deeply entrenched segmentation between regular and non-regular workers, high inactivity rates among young people, difficulty in balancing professional and family life for mothers, and a shrinking workforce due to rapid population ageing. More than 70% of 15‑24 year‑olds are either inactive or unemployed and Korea is on track to lose about 20% of its working-age population (15‑64 years) over the next 15 years alone.
Over recent years, Korea has substantially increased its spending on ALMPs, demonstrating a strong commitment to enhancing programmes to connect jobseekers with jobs. Today, Korea spends 0.6% of its GDP on ALMPs (excluding employment maintenance incentives to abstract from COVID‑19 specific measures), more than the OECD average of 0.45% (and 0.68% in Korea and 0.63% in the OECD average when including employment maintenance incentives), while still keeping some leeway for further increases in case these are necessary, for example due to prolonged economic downturns. Korea should continue to ensure that sufficient funds remain available in the future, allowing to provide high-quality ALMPs to people in need of support.
While the overall ALMP system is well funded, Korea spends less on training programmes than other countries (0.09% of GDP in 2021 in Korea, against the OECD average of 0.11% and over 0.3% in those countries with the strongest emphasis on training), as well as on other types of ALMPs. Instead, one‑third of Korea’s expenditure on ALMPs excluding employment maintenance incentives (or 26% when including employment incentives) is used for direct job creation programmes, limiting the funds that are available for other types of programmes. International evidence points to a limited effectiveness of direct job creation programmes, and there is no comprehensive evaluation of the effects of job creation programmes in Korea. Against this backdrop, Korea should consider conducting in-depth analyses of its direct job creation programmes, and continue only those that perform well, channelling freed resources towards other types of ALMPs. Moving away from an ALMP offer that is heavily focused on direct job creation towards a more diverse ALMP portfolio would help to ensure that jobseekers can access measures that align with their individual needs. Korea could learn from countries that have built a diverse and balanced ALMP portfolio over the years and which focus more on training (e.g. Finland, Estonia, Austria).
Korea’s system of ALMP provision ensures streamlined and equitable access to support, and ensures alignment between ALMPs and broader national employment policy. To further ensure that ALMP strategies and policies meet labour market needs across Korea, further channels for systematic feedback and input by decision makers at local level in Employment Welfare Plus Centres (EWPCs) and partner organisations, as well as frontline staff, should be established. In addition, ALMP regulations and strategies should foresee some flexibility in ALMP design and implementation to enable ALMPs to align well with local needs.
Korea’s system of ALMP provision is characterised by a large number of stakeholders, including Employment Centres attached to the Ministry of Employment and Labor (MOEL), local governments, service providers depending on other Ministries and NGOs. ALMP and social service provision are increasingly integrated into EWPCs, hosting staff of Employment Centres but also partner organisations. While this integration is a big step in the right direction, the quality of collaboration practices within EWPCs varies across Centres, and there is a risk of gaps or overlaps in ALMPs and other services.
Korea should take action to further strengthen collaboration within EWPCs, setting clear co‑operation guidelines for staff and providing tailored training to boost co‑operation. In this respect, Korea could learn from France, where dedicated teams consisting of employment counsellors and social workers exist to provide support to people with both employment and social barriers. Additionally, it will be important that staff levels of staff from partner organisations (NGOs, non-classified public institutions, and local governments) are sufficiently high to allow adequate co‑operation and sufficient provision of social services.
Employment Centres and EWPCs work according to well-defined processes, highlighting a commitment to effective service provision in line with people’s needs. Depending on a jobseeker’s individual circumstances, the person may get support from Employment Centre frontline staff or, in case they belong to a specific vulnerable group, from specialised counsellors. During the COVID‑19 pandemic, EWPC mainly provided non-face‑to-face services and thus the offering of employment services was somewhat limited.
Korea should aim to provide sufficient human resources for in-depth counselling, both in terms of the number and qualification of counsellors. Counselling being a cornerstone of the support Employment Centres and EWPCs provide, counsellors need to access training to learn to master counselling techniques, provide personalised and empathic support while identifying labour market barriers of their clients, as well as to make the best use of digital tools available to them.
Besides further strengthening counselling services to jobseekers, the work of EWPCs should be extended to focus more strongly on employers. Public Employment Services (PES) in some other OECD countries, notably Slovenia, go far in supporting employers, and Korea could build on these experiences to build up more comprehensive support for employers, recognising their key role in the successful integration of jobseekers into the workforce. Korea has taken steps in this direction, introducing a new employer support programme that provides customised services (“Corporate Leap Guarantee Package”), ranging from improving employment conditions to recruitment support. However, to further expand employment services targeted to employers, it will be necessary to ensure sufficient staff and resources are available for these tasks.
According to a mapping between ALMPs and target groups undertaken for this report, Korea earmarks 57% of ALMPs spending towards groups vulnerable to labour market disadvantages, recognising the labour market barriers faced by many youth, older jobseekers, women with career breaks, and people with disabilities. The strong focus on such groups increases the availability of tailored and individualised ALMPs for those who need them most and contributes to cost-efficient use of public resources.
Sixty percent of the spending on ALMPs earmarked to young people is used for recruitment incentives, way ahead of other types of ALMPs. To boost the employability of youth, Korea should consider shifting its ALMPs targeting for young people to focus more on training, especially workplace training. Drawing inspiration from OECD countries like Austria, which successfully implements large work-study programmes, can provide valuable insights. Additionally, streamlining youth-targeted programmes to reduce overlap and fragmentation across programmes can ensure a more efficient allocation of resources.
Korea’s approach to supporting older jobseekers diverges significantly from other OECD countries, with the vast majority of ALMP spending for older people channelled into direct job creation. This strategy should be adapted by offering a more comprehensive ALMP portfolio for older people, including skill development and retraining programmes, particularly those enhancing digital literacy and modernising outdated skill sets. In addition, Korea currently has very big programmes for people who are already in retirement age, which is an unusual approach compared to other countries. For these programmes, it will be important to define specific objectives (e.g. social inclusion, a reduction in poverty) and evaluate their outcomes, allowing to fit these programmes in the wider policy mix in Korea.
The offer of ALMPs for individuals with disabilities is sensible, but nevertheless the labour market and social situation of many people with disabilities remains complicated. Against this background, Korea should intensify efforts to effectively reach and support this group. Strengthening collaboration with NGOs and leveraging the network of EWPCs to proactively inform and engage individuals with disabilities about available services could markedly enhance labour market participation and address both the employment and social hurdles faced by them.
Korea also offers specific ALMPs for women with career breaks, notably in New Job Centres for Women which take part in EWPCs. The ALMPs on offer for women with career breaks, typically mothers, is very balanced, offering placement services, institutional training, and recruitment incentives, ensuring that diverse ALMPs are available. Despite this balanced approach, the challenge of reintegration into the labour market persists for many mothers. Consequently, Korea should assess whether a further increase in the funding dedicated to this group of jobseekers is worthwhile, considering that it is currently low.
Guided by the Korean Government’s ambition to have the world’s best digital government infrastructure, digitalisation is thoroughly embedded in the strategic thinking of Korea’s employment services. The high-level vision of digital employment services is provided by MOEL, while the dedicated digitalisation strategy of the Korea Employment Information Service (KEIS) guides the digital developments in further detail. Only about a quarter of the PES in other OECD and EU countries guide the digital transition process as strategically as Korea.
Looking ahead, the authorities should consider separating more clearly the long-term strategic concept regarding digitalisation from the more detailed action planning that could be made more agile. That would enable the Korea Employment Information Service KEIS in charge of implementing digital PES to introduce more agility in its project management and modern agile development methodologies without losing sight on the strategic vision and objectives. A long-term strategy of KEIS should also aim at covering the underlying relevant frameworks and principles more comprehensively than currently regarding, for example, system and data security, systematic frameworks to ensure digital tools have high value‑added and user-friendliness, software development methodologies, systematic monitoring and evaluation of digital developments, and managing risks of digital tools (ethics, biases, trustworthiness, accountability, transparency, fairness). Managing the risks of digital tools is even more crucial when leveraging advanced analytics and artificial intelligence (AI). The MOEL and KEIS should consider whether cross-policy regulations and institutions advising on ethical AI (and other potential risks) in Korea are sufficient to ensure an appropriate risk management for digital solutions in the PES, or whether additional dedicated frameworks are needed. In addition, the KEIS and MOEL need to co‑ordinate tightly also in the future to ensure that their strategies and relevant frameworks are fully aligned.
Driven by a comprehensive strategic approach to digitalisation, digital services have become an integral part of the PES business model in Korea. The support to jobseekers and employers is not simply digitised, but digitalised, i.e. maximising the value‑added that digitalisation can bring, aiming to provide jobseekers and employers with user-friendly and effective support, often using AI technologies. Some of the digital services available in Korea go beyond those available in the PES in many other OECD and EU countries. For example, some Employment Centres provide jobseekers an opportunity to conduct virtual AI-based mock job interviews to prepare them for actual job interviews later on.
Facilitating access to online training (independent and instructed) via the PES platform could further help Korea deliver jobseeker services as a one‑stop shop as aimed at in the strategies of the MOEL and KEIS. Offering jobseeker skills profiling via the PES platform helps to understand skills and contribute to better targeting of training (including online training), more effective job matching and career services, as well as more personalised support to jobseekers overall. To further facilitate matching labour market supply and demand through digital services for employers, Korea should consider developing a digital tool to assist employers in designing job vacancies, combined with a solution to improve vacancy postings regarding their compliance with legislation and in line with the labour market situation. Such comprehensive approaches would help employers find the staff they need, as well as support jobseekers find good quality jobs.
The Korean labour authorities should develop a framework to better manage service channels to jobseekers optimally and consistently across Korea, considering the type and objective of the specific services, as well as the target groups. Designing the optimal offer of digital self-services to support jobseekers is crucial, as the same approach does not fit all jobseekers. Evaluations have shown that digital counselling arrangements often have lower positive effects than face‑to-face counselling, particularly concerning more vulnerable groups, and are thus not necessarily good substitute services. A digital service that is offered complementary to other services can have positive effects on jobseekers’ labour market outcomes, particularly if the digital service offers additional functionalities and convenience compared to services with similar objectives offered offline. Thus, the Korean PES should aim at creating synergies between counsellors and digital solutions, and not view online and offline services entirely in isolation.
Simultaneously with increasing the availability of digital service channels, the PES in Korea needs to increase the accessibility of such channels. Supporting jobseekers to gain relevant digital skills and access equipment to use digital services, would enable jobseekers to access richer support from the PES, as well as contribute to their job search possibilities more widely.
Successfully prioritising digital channels and increasing their take‑up as foreseen in the strategies of MOEL and KEIS require that these channels provide enhanced performance and better user experience, which can only be achieved if end-user insights are systematically taken into consideration throughout the development process.
Modernising digital infrastructure, including via advanced technologies, has been prioritised in the strategies of the MOEL and KEIS for the past years. Consequently, great progress has been made in adopting innovative tools using state‑of-the‑art technologies for the core employment services. As such, Korea is among the 45% of OECD countries that are using AI within the digital infrastructure of the PES. Currently, AI is used by the Korean PES to facilitate job matching (TheWork) and career counselling (Job Care) services, connecting jobseekers with suitable vacancies, occupations and training by analysing vacancy postings, resumes, and job search behaviour of jobseekers. The digital infrastructure also helps job counsellors in the Employment Centres to deliver their (offline) services to jobseekers and employers, and it is being continuously improved to enhance user experience.
To further improve digital career services, MOEL and KEIS aim to include information on jobseekers’ aptitude, interests and knowledge in the tool Job Care. To better tailor career recommendations to jobseeker interests, Korea could learn from the PES in Flanders (Belgium), which uses the AI-based tool called Orient to help jobseekers better understand their job preferences and the job matching platform, and counsellors to make thus better suited recommendations to jobseekers, while maximising user friendliness. In addition, the MOEL and KEIS could consider improving the functioning of the Job Care platform by feeding in more information on jobseeker skills, for example by learning from short competency tests adopted by the German PES (e.g. on motivation, desire to learn, self-efficacy, objective‑orientation, time‑management and decision-making). Additionally, Korea could analyse whether using Natural Language Processing could help incorporate supplementary relevant competencies, particularly soft skills, in the job dictionary (a taxonomy of occupations and competencies used by KEIS) into the skill requirements for job vacancies or to identify the skills and of jobseekers from the documents they provide, and thus further lighten the administrative burden of job counsellors.
Crucially, the system of employment services in Korea should seek to understand better jobseekers’ digital skills to make more informed decisions about providing them with digital and/or face‑to-face channels, and refer them to ICT training as necessary. While some jobseekers have certificates for the ICT skills that will allow them to use PES online services independently, it is important for the PES to be able to identify those jobseekers that indeed need face‑to-face support early on to avoid becoming long-term unemployed. The MOEL and KEIS should consider whether to co‑operate with a provider of digital skills testing, integrate these tests within their digital infrastructure (even if only via linking to another platform), trigger referrals to these tests if jobseekers lack relevant certificates, and use the test results for profiling jobseekers for improved channel management and targeting training. While the digital skills of a jobseeker have not been tested or certified, referring them to counselling in the Employment Centres would be advisable.
As the next major step regarding digital infrastructure for employment services, the MOEL and KEIS are seeking to better integrate the different digital platforms used by Employment Centres, jobseekers and employers. The new system called Employment24 would enable a more tailored and comprehensive response to jobseeker and employer needs, providing support regarding employment services, training and benefits via the same system. For PES staff, a more integrated system would enable faster administrative processes and more automation.
Employment24 will aim also at strengthening data exchanges with other registers and increase data validity and integration to further support the concept of a one‑stop shop, and increase automation and efficiency. The MOEL and KEIS have made significant progress in establishing data exchanges with other registers over the past decade and should continue their efforts to avoid duplicating information collection from jobseekers and employers. Richer automatic data exchanges would also support evidence generation on ALMPs, and even automating impact evaluations (such as done in the Estonian PES). This would free up KEIS capacity to meet more sophisticated needs for evaluation, such as designing randomised controlled trials for new policies and approaches or developing evaluations beyond specific ALMPs, such as digital tools.
To further increase the value added of Employment24, Korea should aim to strengthen the information used in the platform on vacancies available in the labour market. For example, web scraping to pool additional vacancies (such as done in the Dutch PES) and revealing the hidden labour market by predicting hiring needs (such as done by the French PES) could improve the value added of Employment24. A higher coverage of vacancies on the labour market would provide more opportunities for jobseekers using Employment24, as well as enrich the information in the job dictionaries that support the vacancy matching and Job Care career management algorithms.
Improvements in intuitiveness, good user support and greater interactivity will be required to further enhance the quality of user experience of Employment24. One way of achieving this is introducing a chatbot within the platform to guide users, which is also an aim of the strategies of the MOEL and KEIS. Similar bots using Natural Language Processing could be introduced for written communication with jobseekers and employers (such as being developed in the PES in Luxembourg) to further decease administrative burden.
Korea has made significant efforts to implement systematic monitoring of its ALMPs that combines quantitative and qualitative analyses. In line with the government’s aspiration to enhance programme efficiency, this regular and comprehensive monitoring has enabled the identification and adjustment of programmes to better meet labour market needs. The results of annual monitoring are taken into account for budgetary decisions, as well as the choice of contracted-out service providers.
In addition to this comprehensive approach to monitoring, Korea would benefit from investing in in-depth evaluations, particularly counterfactual impact evaluations (CIE). These evaluations, which are less prevalent in Korea, offer the potential to identify the effectiveness of ALMPs by assessing their net impact on labour market (and social) outcomes using advanced techniques.
By allocating the necessary resources to policy evaluations and leveraging the rich administrative data and increasing digital capacity, Korea could reliably identify the most cost-effective ALMPs, aligning with best practices in other OECD countries. Korea could learn from countries like Canada, Denmark, Estonia and Germany, where CIEs are conducted regularly and some processes almost automated to save funds and time. Such a strategic shift would not only complement the insights gained from monitoring but also ensure that ALMPs deliver tangible benefits to the labour market, maximising the return on investment in these programmes.
Digital tools and services need to be systematically monitored and evaluated similarly to other services and measures provided by PES to ensure that they perform well and for continuous improvement. Monitoring take‑up numbers to understand usage and accessibility and collecting user-feedback to pinpoint issues with design and functioning are critical to fine‑tune digital tools and services. In addition, they should be rigorously evaluated using CIE methods to understand whether they are helping jobseekers and employers.
Therefore, the MOEL and KEIS should introduce the evaluation of the effects of digital tools and services systematically in the development and adoption phase. Ensuring performance and avoiding negative side‑effects need to be addressed already in the initial phases of designing new digital tools and services. For example, they should not be treating some population groups unfairly, distort labour market functioning or substantially alter competition between jobseekers for job opportunities. In addition to testing and piloting undertaken by KEIS now, the new digital tools and services should be piloted using randomised controlled trials whenever feasible and thereafter rigorously evaluated. In addition, such evaluations should study the effects on sub-groups to ensure that the new solutions work for all. Furthermore, additional CIEs can be relevant even after full roll-out as the effects can differ when scaled up. CIEs need to be accompanied by process evaluations to further pinpoint needs for fine‑tuning the digital tools and services.
Maintain funding for ALMPs at robust levels to ensure that sufficient resources are available to provide well-performing and comprehensive ALMPs to people in need of support.
Evaluate direct job creation programmes and continue only well-performing programmes while considering terminating those with unsatisfactory results. Channel freed resources to other types of ALMPs that are currently less well funded, especially training programmes, including workplace‑based training.
Improve the co‑operation between staff from different institutions in EWPCs, including through staff training with a focus on co‑operation, systematic co‑operation processes, and dedicated teams consisting of staff from different institutions.
Ensure a sufficient number of staff from partner organisations (such as local municipalities and NGOs) in EWPCs to enable sound co‑operation practices and a comprehensive service offer.
Establish additional bottom-up channels for systematic feedback and input by stakeholders at the local level to ensure local adaptability.
Aim at sufficient human resources for in-depth counselling, both in terms of the number and qualification of counsellors. Train counsellors to master counselling techniques, identify jobseekers’ employment barriers and make the best of digital tools available to them.
Profile jobseekers’ digital skills to inform channel management (i.e. digital or face‑to-face provision of services) and training. The MOEL and KEIS should consider co‑operating with a provider of digital skills testing to identify relevant tests, integrate these tests within the digital infrastructure, and trigger referrals to these tests if jobseekers lack relevant certificates. Profiling needs to identify those jobseekers that require face‑to-face support early to prevent them becoming long-term unemployed.
Continue the work of counsellors specialising on working with employers, and provide tailored support to employers, such as assistance with vacancy descriptions, help to broaden reach among possible job candidates, conducting initial screenings to match the right profiles with vacancies, and post-placement support.
Continue to earmark a substantial share of ALMP spending to the groups most in need of support, including youth, older jobseekers, people with disabilities and mothers with career breaks.
Put a greater focus on training in ALMPs targeting young people, especially workplace training, to boost the employability of youth.
Provide a more comprehensive offer of ALMPs for older jobseekers, including skill development and retraining programmes, while reducing the role of direct job creation programmes.
Define specific objectives of ALMPs targeted to people who are already above retirement age to assess their impact and their role in Korea’s wider policy mix.
Increase outreach to people with disabilities to connect more people in this group with the labour market.
Conduct analyses to assess whether the current offer of ALMPs for mothers with career breaks is sufficient and consider increasing the share of ALMP spending earmarked to this group.
Include key principles and frameworks for the digital transition in the long-term digitalisation strategy of the KEIS regarding system and data security, development methodologies, end-user insights, monitoring and evaluation of digital solutions, and risk management (ethics, biases, trustworthiness, accountability, transparency, fairness) in co‑operation with relevant institutions.
Introduce more agility in implementing digitalisation and adopt modern agile development methodologies by distinguishing action planning from long-term strategies that could be revised yearly to cover, for example, the next three to five years (a rolling action plan). Keep action planning fully aligned with the objectives and principles of the long-term strategy.
Continue tight co‑ordination between the KEIS and MOEL to ensure that the strategies and relevant frameworks are fully aligned.
Develop a concept to manage service channels to jobseekers optimally and consistently across Korea, considering the type and objective of the specific services, as well as the target groups.
Increase the accessibility of digital channels by supporting jobseekers to gain digital skills and access relevant equipment.
Take end-user insights systematically into account in developing and improving digital channels to increase performance and user experience.
Facilitate access to online training via the PES platform covering both independent and instructed training, including to improve job search skills.
Continue efforts to use information on jobseekers’ interests and skills to tailor career services, including by identifying supplementary relevant competencies (particularly soft skills) in the job dictionary and additional competencies in jobseekers’ documents.
Assist employers in designing job vacancies and combine this with a solution to improve vacancy postings regarding their compliance with legislation and the labour market situation.
Strengthen the information used in the PES platform on vacancies available on the labour market by web scraping to pool additional vacancies and predicting hiring needs to reveal the hidden labour market.
Introduce a chatbot within the PES platform to guide users and an email-bot in the back-office for written communication with jobseekers and employers to further decease administrative burden.
Continue efforts to establish data exchanges with additional relevant registers to avoid duplicating information collection from jobseekers and employers.
Use the rich administrative data and advanced digital capacity to automate ALMP monitoring and regularly needed impact evaluations.
Shift ALMP evaluation activities towards more in-depth evaluations, particularly counterfactual impact evaluations, to assess the net impact of ALMPs on labour market (and social) outcomes, including long-term impacts.
Introduce counterfactual impact evaluations of digital tools systematically in the development and adoption process. Ensuring performance and avoiding negative side‑effects need to be addressed already in the initial phases of designing new digital tools and services.
Pilot new ALMPs and digital tools and services using randomised controlled trials whenever feasible and thereafter evaluate the results rigorously. Conduct counterfactual impact evaluations using quasi‑experimental design to evaluate the effects after large‑scale roll-out.
Study the effects by sub-groups of users and beneficiaries to ensure that the new ALMPs and solutions work for all.
Support impact evaluations by process evaluations to further pinpoint needs for fine‑tuning the digital tools and services and ALMPs.