South Korea’s senior employment program for those over the age of 65 years

In South Korea, rapid aging of the population has posed two pressing tasks: guaranteeing sufficient income and quality of life after retirement, and maintaining the working force. In 2004, South Korea implemented the Senior Employment Program to provide supplemental income to lift people over the age of 60 out of poverty, increase social participation, and maintain health. In 2021, approximately 840,000 people, 6.4 percent of those aged 60 or older, participated. Monthly earnings range from KRW 270,000 to KRW 1,961,000 (USD 209 to USD 1,521).¹

The program includes three types of work opportunities:

1. Public service jobs: Local governments primarily hire people with low income and education levels to serve needs in the local community, such as elderly-to-elderly care and maintenance of public facilities. Participants work 30 hours a month for KRW 270,000 (USD 209).
2. Private sector jobs: Local governments provide subsidies to private corporations who hire participants from the programme. The wage ranges from KRW 365,000 to 1,961,000 (USD 283 to 1,521), according to working hours and types of jobs.
3. Social care service jobs: In 2019, the Korean government created a third social care service jobs work program in response to the increasing needs of social care. Participants work approximately 60 hours a month for an average wage of KRW 713,000 (USD 553).²

The eligibility criteria varies across the three work streams. However in general, jobs are available to people over the age of 65 (for some programs, over 60). In principle, only public service jobs are available for those below a certain income threshold (poorer 70 percent of the people aged 65 or over). However, since there are usually higher demands than the number of jobs provided, many programs prioritize low-income households in selecting their participants.

Implementation

The Senior Employment Program was adopted in 2004. Its legal foundation was established in 2005 in the Welfare of the Aged Act and the Framework Act on Low Birth Rate in an Aging Society. In the same year, the Korea Labor Force Development Institute for the Aged, a government agency supervising and implementing the program, was established under the Ministry of Health and Welfare. The size of the program has continuously expanded throughout the years. When first adopted, the budget could only cover 35,000 jobs. In 2021, around 840,000 people participated in the program.³

Cost

The policy is tax-financed, with the local governments bearing around half the budget. The total budget in 2021 amounted to KRW 2.3 trillion (USD 1.78 million), taking up 0.11 percent of GDP.⁴

Assessment

The program has improved the participants’ quality of life in various ways. According to a comprehensive study conducted in 2021, the program reduced the difference between the national relative poverty line (KRW 878,591 or USD 681) and the participants’ monthly income by 16 percent. Also, participants showed statistically significant improvements in the quality of social relationships, physical health, and mental health compared to those on the waiting list for the program, who share similar socio-economic characteristics. Health improvements have decreased out-of-pocket medical expenses of participants, amounting to KRW 700 million (USD 543 million) annually. Numerous studies have reported a cost-benefit ratio (an indicator that summarizes overall value for money of the project) of 1.35~1.79. That the ratio exceeds 1 indicates its cost-effectiveness.⁵

The program has enjoyed widespread support. In 2019, over 600,000 people applied to participate in the public service work program, but approximately 100,000 people were placed on a waiting list due to budget restraints.⁶ While the current conservative government has announced a reduction of public-supported employment programs for the working-age population, it has increased the budget for this program, acknowledging its importance.

However, the program still faces two main challenges. One concerns the small size of the budget and low wage levels. Some civil society organizations claim that the government should vastly expand the program and increase its wage levels to make meaningful changes in the national poverty rate of those over the age of 60.⁷ The second concerns the quality of jobs, since most jobs are for low-skilled workers. As the baby-boomer generation born in the 1960s with higher education levels reaches their 60s, they may require higher-quality jobs that can make use of their skills and experience.

Tags

• Care Economy
• Income & Wealth
• Older Adults
• Republic of Korea