Demographic shifts worldwide have increased the number of older workers, and many economies are facing a critical question: Are their labor markets ready to support older workers?

Researchers have found that, in the United States, the surge of older workers has gone hand–in-hand with an increase in the number of “age-friendly jobs” – roles with working conditions more suitable for aging employees, such as placing fewer physical demands or offering greater scheduling flexibility. Yet it remains unclear whether comparable trends have taken hold in other aging economies.

A new study, published in the Journal of the Economics of Ageing, helps fill in this gap by examining the evolution of age-friendly jobs in South Korea (hereafter Korea), where the number of workers aged 50 and over increased by 165 percent from 2000 to 2023. Korea is now officially considered a "super-aged" society, and the government is doubling down on its efforts to bolster the workforce.

The study, co-authored by Hyeongsuk Kim and Chulhee Lee, both of Seoul National University, and Stanford health economist Karen Eggleston, the director of APARC’s Asia Health Policy Program, examines Korea’s workforce and economy to determine whether the nation significantly expanded its 50+ workforce by creating job opportunities favorable for older workers or if some other mechanism is at play. 

The co-authors examined the job characteristics experienced by older Koreans relative to their younger counterparts and U.S. older workers. Second, they analyzed data collected in 2020 about Korean workers, evaluating their jobs based on various parameters in the Age-Friendliness Index (AFI), a tool that measures the degree to which jobs are more suitable for older workers. The researchers considered AFI factors such as the requirement for heavy physical activity, the pace of the job, and the possibility of telecommuting. They also examined how the number of age-friendly jobs changed from 2000 to 2020.

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The study finds that, while age-friendly jobs have increased in Korea, the number grew more slowly than in the United States, indicating that the U.S. market responded more quickly to changes in workforce demographics. Furthermore, the study indicates that older Koreans were not the main beneficiaries of age-friendly jobs. Instead, women and college-educated workers benefited more from these jobs, while non-college-educated men have seen fewer gains. “These results highlight the uneven adaptation of Korea’s labor market to demographic change and suggest that social norms and labor market frictions shape age-friendly job creation and who benefits from those jobs,” the researchers write.

The study also unveils that, in Korea, the working conditions of employees aged 50–61 differ significantly from those aged 62 or older. Despite the nation's high employment rates for those aged 65 and older, the researchers discovered that a third of working Koreans over the age of 62 held jobs requiring heavy physical activity and earned lower wages. Additionally, only a little over one-fifth of them had jobs that allowed for “mostly sitting.”

Labor Market Frictions

The study’s authors propose several explanations for why Korea’s economy, despite a significant increase in older workers, has not adapted as quickly as the United States in placing these workers in age-friendly occupations. One reason is Korea's comparatively low level of pension support, which forces workers to fill a disproportionate number of low-skilled, temporary, and day jobs. It may be that many older workers are forced to work, regardless of whether the jobs are friendly to their needs. Another reason may be the rigidities of the labor market, including strong protections against employees being laid off. Such protections are beneficial for workers, but they restrict companies' ability to restructure their workforce. Moreover, the role of chaebol, or large corporations, may also be significant. Although chaebol are producing and selling more, they have also increased automation and resorted to outsourcing instead of hiring additional workers.

Older workers in Korea are also facing competition from women for age-friendly jobs. The researchers noted significant gender-related changes in the country's education and employment levels. In 2009, the percentage of women enrolling in college surpassed that of men, and the percentage of women in the workforce increased by 2.5% from 2000 to 2023. Korean women are likely to have an even stronger preference for the flexibility of age-friendly jobs than American women because of gendered responsibilities for household production.

The study’s results, researchers said, reinforce key findings from previous studies: "that 'age-friendly' jobs appeal to many kinds of workers, not just older adults; and that labor market frictions shape who benefits from age-friendly jobs."

As governments grapple with rising life expectancies and shrinking traditional working-age populations, ensuring that older adults can continue working safely and with dignity is key to sustaining economic growth and social stability. According to the study, South Korea has made impressive strides in keeping older people in the workforce, but the next challenge is ensuring work itself evolves to meet their needs.