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S. Korean senior employment rate near top of OECD rankings

All News 09:13 June 03, 2016

SEOUL, June 3 (Yonhap) -- The employment rate for South Korean senior citizens ranks near the top of global rankings as more have to work after retirement due to an inadequate pension system and a lack of preparation for old age, a report showed Friday.

The employment-to-population ratio for South Koreans aged 65 and older came to 31.3 percent in 2014, the second highest among members of the Organization for Economic Cooperation and Development (OECD), showed the report by the Paris-based club of rich economies.

South Korea's figure is two times the 13.4 percent average for the 34 OECD member countries. Iceland posted the highest senior employment rate of 36.2 percent.

Comparable figures were 20.8 percent for Japan, 10 percent for Britain, 5.8 percent for Germany and 2.3 percent for France.

In particular, South Korea's employment rate for people aged 75 and older stood at 19.2 percent in the cited year, the highest among 24 countries with comparable figures.

Excluding South Korea, Mexico was the only country among the 34 nations with a double-digit employment rate for the age group with 15.7 percent.

Experts said that South Korea's high employment rate for the elderly mirrors its inadequate national pension system and insufficient nest eggs.

"In advanced countries, senior citizens can live on the state pension, but South Korea's inadequate national pension system forces many to work after retirement," said Lee Joon-hyup, a researcher at the Hyundai Research Institute.

In South Korea, people can start getting state pensions from 61 onward. Seoul plans to push this back gradually to 65 to reduce the burden on state coffers.

South Korea extended the retirement age to 60 in 2015, requiring larger companies to adopt the system starting this year. In 2017, companies that hire fewer than 300 workers are also required to adopt it.

Another problem is that most elderly people end up in low-paying, part-time jobs, making many live in poverty, he added.

South Korea's poverty rate for the elderly came to 47.2 percent in 2014, the highest among OECD members.

According to government data, South Korea is on the verge of becoming an aged society, with the share of senior citizens aged 65 or older reaching 13.1 percent of the country's 50.62 million population last year. A country is defined as an "aged society," if more than 14 percent of the population are 65 or older.
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