Introduction Dual dimensions of non-regular work and SMEs in the Republic of Korea: Country case study on labour market segmentation‎ - 1.8 MB‎

3 Table 1 Trends in major economic and social indicators Real GDP growth rate percentages Unemployment rate percentages Employment thousand Employment to population ratio percentages Labour participation rate percentages Total Women Total Women Total Women 1994 8.8 2.5 2.0 19,848 60.1 46.9 61.6 47.8 1995 8.9 2.1 1.7 20,414 60.6 47.6 61.9 48.4 1996 7.2 2.0 1.6 20,853 60.8 48.1 62.1 48.9 1997 5.8 2.6 2.3 21,214 60.9 48.6 62.5 49.8 1998 -5.7 7.0 5.7 19,938 56.4 44.4 60.6 47.1 1999 10.7 6.3 5.1 20,291 56.7 45.2 60.6 47.6 2000 8.8 4.1 3.3 21,156 58.5 47.0 61.0 48.6 2001 4.0 3.8 3.1 21,572 59.0 47.7 61.3 49.2 2002 7.2 3.1 2.5 22,169 60.0 48.4 61.9 49.7 2003 2.8 3.4 3.1 22,139 59.3 47.4 61.4 48.9 2004 4.6 3.5 3.1 22,557 59.8 48.3 62.0 49.8 2005 4.0 3.5 3.1 22,856 59.7 48.4 61.9 50.0 2006 5.2 3.3 2.8 23,151 59.7 48.8 61.7 50.2 2007 5.1 3.0 2.4 23,433 59.8 48.9 61.7 50.1 2008 2.3 3.0 2.4 23,577 59.5 48.7 61.4 49.9 2009 0.3 3.4 2.7 23,506 58.6 47.7 60.7 49.0 2010 6.3 3.4 2.9 23,829 58.7 47.8 60.8 49.2 2011 3.6 3.0 2.7 24,244 59.1 48.1 60.9 49.4 Source: Korea National Statistical Office, Economically Active Population Survey; Bank of Korea, Economic Statistic System. However, these mac §ro trends in employment hide significant changes in the structure of employment towards further fragmentation of employment along multiple and complex dimensions. 2.1.1. Employment structure – the growing importance of SMEs, service sector and non-regular employment One critical change in employment structure is the growing importance of SMEs in their share of employment Figure 1. Traditionally, large firms, in particular the affiliates of Chaebol , were the source of job creation, but the 1997 crisis marked the end of this pattern, as their contributions to job creation have been negative. Then, the “engine of job creation” has since shifted gradually to SMEs, and as a result, the share of employment in large firms was reduced from 25 per cent in 1996 to only 12 per cent in 2007. Figure 1 Who is the engine of job creation? : Employment creation by large enterprises and SMEs, 1994-2007 Source: Korea Federation of Small and Medium Business, Statistics of Small and Medium Enterprises. 4 Another notable change in employment structure is the expansion of the services sector, or “de-industrialization”. As the manufacturing sector has lost its status of “engine of employment creation” e.g., during the developmental period of the 1960s to the early 1990s, the share of service industries in total employment increased substantially from about 60 per cent in 1992 to almost 75 per cent of the total employment in 2008 Figure 2. Figure 2 Who is the engine of job creation? Employment creation by sector, 1993-2008 Source: Korea National Statistical Office, Economically Active Population Survey. Finally, these structural shifts in employment have been accompanied by increase in number of non-regular workers, notably temporary and daily workers in Korea Figure 3. 5 According to the Economically Active Population Survey EAPS, the growing trend accelerated after the 1997 financial crisis. Despite some reduction in the number of these workers in recent years, it still remains much higher than the pre-crisis level. We will discuss this issue in greater detail in the next section. Figure 3 Trends in temporary and daily workers, 1990-2011 thousand Source: Korea National Statistics Office, Economically Active Population Survey. 5 As the data for the non-regular workers classified by type of employment, which are provided by the Economically Active Population Survey, Supplements, are available only from 2002, the classification by employment status from the Economically Active Population Survey is used here to capture the long-term trend of non-regular type of workers.