① The labor force participation rate of male youth, ages 25‑34, declined from 89.9% in 2000 to 82.3% in 2025, indicating a substantial decrease relative to the most advanced economies. In particular, the decline in labor force participation among Millennial men (born 1981-95) persists into their late 30s. We examine this phenomenon through three key lenses: (i) shifts in the competitive structure among youth, (ii) transformations of industrial structure, and (iii) the impacts of population aging and the AI diffusion on labor market entry for youth.
② Firstly, the increase in labor force participation among highly educated women has resulted in intensified competition. Our empirical analysis reveals that the probability of labor force participation for highly educated men born 1991‑1995 is 15.7 percentage points lower than for the reference cohort born 1961‑1970, whereas that for women increased by 10.1 percentage points. Consequently, the gender composition of the highly educated workforce has converged, with the shares of men and women in professionals and clerical occupations now roughly equal. These trends suggest that the expansion of the labor supply competing for similar positions has resulted in more competitive labor market entry conditions for male youth compared to the past.
③ Furthermore, industrial transformations have primarily constrained the labor supply of men with lower educational attainment. By 2025, the probability of labor force participation for men with an associate degree or lower is 2.6 percentage points lower than in 2000, reflecting a decline in middle‑ and low‑skill occupations in manufacturing and construction and a corresponding reduction in labor demand for this group.
④ Population aging and AI diffusion also have restricted labor market entry pathways for youth. From 2004 to 2025, the employment rate for the elderly has increased by 12.3 percentage points, with this growth being predominantly observed within high‑skill occupations. Moreover, it is notable that 98.3% of the youth employment lost over the preceding four years is concentrated in sectors with higher AI exposure. This finding suggests that AI diffusion has a detrimental effect on entry‑level employment in its early phase.
⑤ The decline in the labor force participation rate among male youth and the expansion of labor force participation among women and the elderly reflect a diversification of labor supply driven by social norm change and demographic shifts. The transformation of the industrial structure has also played a role in shaping this trend. Consequently, institutional support must be provided for the seamless labor market entry of male youth by strengthening technical education. In addition, rather than relying on short-term support measures for youth alone, broader structural reforms of the labor market should be pursued, including easing the excessive rigidity of employment protection for regular workers and facilitating the transition of non-regular workers to regular employment.