BOK’s Analysis of’The Impact of Deteriorating Employment Situation on New College Graduates’
The probability of getting a job at a large company within 1-2 years of graduating last year fell 1.75%p
(Seoul = Yonhap News) Reporter Seong Seo-ho = It is estimated that the annual salary of new college graduates in the first to second year of employment has decreased by more than 2% as the job market froze due to the spread of the novel coronavirus infection (Corona 19) last year.
On the 15th, deputy head of the Bank of Korea Sang-il Oh and researcher Lee Sang-ah analyzed the short- and long-term effects of worsening employment conditions on new college graduates.
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The researchers analyzed the impact of the worsening of the employment situation through the Korea Labor Panel (1998-2019), which has a relatively long time series. In particular, in order to clearly identify the long-term impact of the labor market shock on new graduates, the scope was limited to new college graduates.
As a result of the analysis, the rise in the unemployment rate caused by the economic downturn not only reduced the wages of new college graduates, but the effect was extended to the 3rd to 4th year of employment.
When the unemployment rate in the graduation year increased by 1 percentage point (p), annual wages in the first and second years decreased by 4.3%, and in the third to fourth years, the annual wage decreased by 2.3%.
“On average, the average unemployment rate for the past 10-20 years was 3.5%, and last year the unemployment rate was 4%,” said Oh Sang-il, deputy chief executive. It can be estimated that the percentage has decreased,” he said.
The fact that wages do not recover over time is a kind of scarring effect, and the researchers explained that the main factors include an increase in downward employment, loss of opportunities to accumulate skills, inefficient job search, and lack of opportunities for promotion.
By college, the negative impact was greater for new graduates of middle and low-ranking colleges and two-year colleges. Dividing by major, the humanities graduates suffered the most damage, but the effect was minimal on the medical and professional disciplines with strong professional characteristics.
It is also estimated that the impact of the labor market that occurred when graduating from college has a negative impact on employment in large companies.
As a result of the analysis, if the unemployment rate in the graduation year increased by 1 percentage point, the likelihood of employment in a large company fell by 3.5 percentage points in the first to second years and 2.3 percentage points in the third to fourth years.
If you take the unemployment rate last year, the probability of entering a large company in the first or second year of graduation falls by 1.75 percentage points.
Due to the rise in the unemployment rate in the graduation year, men’s wages were reduced by 2 to 5% until the fifth to sixth year, but women’s wage loss rate (0.7 to 2.9%) was relatively low. In the case of women, the researchers explained that the negative correlation between marriage and employment is highly influenced.
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2021/03/15 12:00 sent