The Organization for Economic Cooperation and Development(OECD) said that Korea should strengthen its social safety net against a severe economic downturn.

In its 2011 employment forecast report released on September 15, the OECD said that Korea's income safety net is not sufficient compared to the OECD member countries.

According to the report, Korea's labor market is recovering swiftly to approach a pre-crisis level. Korea's unemployment rate shot up from 3.1% before the crisis to 4.3% in the first quarter of last year, and decreased to 3.4% in the second quarter this year while the average unemployment rate of OECD countries rose from 5.7% before the crisis to 8.2% in the second quarter this year.

However, the report said that Korea's social safety net is not sufficient even though its labor market is recovering fast from the crisis.

It pointed out that income support system such as an unemployment benefit served as a buffer against a fall in living standard in the OECD countries, but it has a limited impact in Korea with its relatively short benefit period.

The OECD urges Korea to strengthen its social safety net in case of an economic downturn.

In fact, the US extended the unemployment benefit period from 26 to 99 weeks to minimize the economic difficulties of the unemployed.

Moreover, the report also emphasized that the Korean government needs to enhance support to the unskilled and the youth who are vulnerable in the labor market.

Youth employment rate in Korea is way below the average in the OECD countries. As of the first quarter, employment of the youth and unskilled declined by 5.4% and 9%, respectively, compared with 3 years ago.

Source: Yonhap News (Sept. 15, 2011)