Korea overcame the 1997 financial crisis and thereafter has sustained high economic growth to improve its employment situation. However, in the process of overcoming the financial crisis, labor market flexibility has increased and the unemployment rate remains high. However, the biggest change that the Korean labor market has experienced following the financial crisis is that amidst changes in the business environment and corporate restructuring, the proportion of workers in unstable employment, including casual labor and daily workers, has increased to exceed that of those in permanent employment. In addition, the number of discouraged workers is growing, resulting in an increase in the non-economically active population and a reduction in the participation rate. In addition, the ratio of the long-term unemployed, or those who have been out of work for 6 months or more, has significantly decreased in the course of overcoming the crisis. The basic framework of Korea's post-crisis unemployment policy consists of four pillars, with the active labor market policy at the center. First, as part of the supportive measures for continuous employment. Second, there exist measures to create new employment, including the introduction of an internship program, and a social welfare assistant worker program. Third, there are work capability enhancement measures, including re-employment training of the unemployed and a training program for the female heads of households. Fourth, the social safety net provided to the unemployed comprises unemployment benefits and a loan service. Similar to the Japanese employment insurance system, Korea's employment insurance consists mainly of three projects, namely, unemployment benefits, vocational competence development project, and employment security project. Depending on the target group, availability of financial resources, and training programs, the development of vocational competence of the unemployed can be divided into re-employment training of the unemployed, employment promotion training, employment training of the unemployed, government-consigned training, and business start-up training. Therefore, the vocational competence development project is mainly concerned with skill enhancement training of the employed and re-employment training of the unemployed, while workers make very little use of paid-leave training and subsidy for enrolling in classes in terms of voluntary efforts for skills development. Employment security project is aimed at providing support, on a rational basis, to promote employment security for workers and to facilitate employment adjustment in companies in view of changes in the industry structure and technological advances. It is a policy linked to the policy measures of the active labor market and unemployment insurance. Moreover, these unemployment policy measures should serve as plans for promoting development of vocational competence in order to cope with the rapidly changing business environment and to enhance employment capability. To that end, first, it is necessary to strengthen self-directed learning for the development of vocational competence of workers. Second, in order for labor mobility to occur efficiently, it is necessary to reduce frictional unemployment and ease the mismatch of skills, and function in the labor market through the development of vocational competence. Third, there is a need to establish a lifelong learning system to create greater opportunities for the development of vocational competence.
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