Author: Hyejin Kim(Bank of Korea), Jongwoo Chung(Bank of Korea)

 This paper examines changes in the labor market due to demographic changes and estimates the changes in the number of employed people by industry over the next 10 years using the Population Projection and the Regional Employment Survey. The results show that the number of people employed in the service sector is expected to increase, while the number of people employed in manufacturing is expected to decrease, especially in low-skilled manufacturing. In response to the long-term decline in the labor force, a policy to promote the employment of women aged 30-44, who have a high proportion of career breaks, is found to increase the number of high-skilled service workers by about 380,000 relative to baseline estimates. A policy to increase the number of older workers is expected to prevent the decline of workers in high-skilled manufacturing (from a decline of 40,000 to an increase of 30,000 relative to the baseline estimate) and increase employment in low-skilled services (by 680,000 relative to the baseline estimate).