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<Table 18> Results of the Youth New Start Project implementation
(Unit: million won, person)
Year Budget Number of participants
2008 1,000 3,263 2009 16,850 16,660 2010 9,185 12,549
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<Table 20> Proportion of persons satisfied with the IAP establishment (2009)
(Unit: %)
Sufficiency of IAP establishment time
Contribution of the person in charge regarding IAP establishment
Concreteness of the IAP for job- seeking activities
77.4 76.7 67.2
Source: Recompiled from Ju, M H et al. (2009)
Reviewing the participation status by program phase, participating phase 1 and 3 assumed the largest proportions, followed by phases 1→2, and phases 1→2→3. The proportion of passing phase 1 only assumed the smallest proportion.
<Table 21> Participation status by program phase (2010)
Phase 1 Phase 1→2 Phase 1→3 Phase 1→2→3
17.4 24.7 36.8 21.1
Source: Recompiled from Ryu, J S et al. (2010)
Reviewing the participation status in phase 2, participants are distributed among various programs. Almost half of the phase 2 participants took part in vocational training.
<Table 22> Phase 2 participation status (2009)
(Unit: %)
Youth workplace
experience program Training voucher SME youth
internship Steppingstone Work
Other (business foundation school/other
programs)
28.9 48.4 9.0 11.5 5.9
Source: Recompiled from Ju, M H et al. (2009)
Another major characteristic of the Youth New Start Project is that almost all active labor market policies are implemented. Besides the employment service that is known to be the most cost-effective, the vocational training opportunities, had proven to be effective from a long-term perspective, are given. In addition, various job experience opportunities, which encompass both the private and public sectors, and employment subsides are provided. When a packaged program like this is provided, the cost of policy implementation increases, but policy effectiveness may be improved.
However, experiences in various policy implementation and infrastructure implementation must be secured in advance in order to make those policies effective.
As a result of carrying out the employment service advancement programs steadily since 2005, the employment service infrastructure is improved significantly from what it was before. However, it still leaves much to be desired compared with those in advanced countries. The organization and personnel providing the public employment service are quite insufficient, quantitatively, and professionalism in the private sector is in short supply. In particular, know-how about providing the services to improve the employment possibilities of
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the vulnerable classes with relatively low employment competitiveness is insufficient, as the public employment service was mainly provided for employment insurance subscribers.
Vocational training produced only limited results. Although the employment rate of the trained unemployed reached over 60% every year, giving the impression that training was useful in increasing the employment rate, the rate of finding employment in the area of training was under one third of the official employment rate. In addition, training for the unemployed does not increase income or wages after training, and some courses even decrease income or wages, according to Yoo, G J et al. (2007), Nah, Y S et al. (2008), Chae, C K & Kim, M R (2004), and Chae,C K et al. (2008). The small size of the private organizations that manage the training also acts as a factor limiting the training results.
It was found that the youth workplace experience program has problems in the management system, such as participation of workplaces that do not provide training effects, or that dismissed existing workers to take advantage of cheap young interns (Board of Audit and Inspection, May 2005). Other problems were also found, such as the participation of only a few private companies, and the high proportion of small-sized businesses, low quality training courses, and high dropout rates (Lee, Y H et al., 2008). In addition, the evaluation of the National Assembly Budget Office (December 2006) pointed out that the uniform training period, poor program, insufficient training program support, and illegal use of the work experience program should be improved upon, instead of changes to the policy itself.
The SME youth internship was found to have achieved significant results by making a contribution to actual job creation, as the permanent job-switching rate (70%) exceeds the original target and the dropout rate is not high considering the turnover rates at regular companies. In addition, the internship support program showed good results in resolving the program of manpower shortages in the manufacturing industry (Cho, JM et al., August 2011).
However, if a supplementary index like the employment durability rate is used for evaluation, the project results are not good enough. According to a survey by the National Assembly Budget Office (October 2010), only 67.0% of the project participants continued employment six months after switching to the permanent job. Over 70% of the SME internship participants have graduated from a polytech or higher educational institute, but over 60% of the participating companies were an SME employing less than 50 employees.
Therefore, poor work conditions and low wages affect employment continuation negatively.
Also, the high rate of switching to a permanent job implies that the program may be misused as a process of hiring regular workers. In this respect, there is a possibility of a deadweight loss. In particular, the SME internship program was sometimes operated as a means of recruitment, and the employment capability improvement function through career development and training was relatively weak.
According to an effectiveness analysis of the new youth employment promotion subsidy introduced in 2004, the program was helpful in resolving manpower shortages at SMEs, and the female employment rate was improved as many females participated in the program. It was also evaluated that receiving the new youth employment promotion subsidy reduced the job search period, extended the job retention period, and increased income levels (Jeong, I S;
et al.(2006)). However, the analysis by Choi, G S& Lee, J H. (2007) indicated that the subsidy beneficiary received more wages than other comparative groups, but took longer to
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find a job. They also found that the employment retention rate and unemployment risk ratio were not significantly different. In addition, the National Assembly Budget Office (October 2010) evaluated that the employment support effect of the subsidy was not high, as the employment continuation rate was only 36.4%. Of course, the program is not free from the fundamental problem of giving an employment subsidy, risking a deadweight loss and the replacement of regular employment (by the program).
The employment encouragement benefit was implemented as part of the manpower shortage problem solving methods for SMEs, and showed a relatively high dropout rate (23.4%). Nevertheless, the results of the program were evaluated highly, as the employment continuation rate after six months was 76.6% after joining the program. However, it is too soon to evaluate the program fully.
In particular, it is important to implement the grant system for the temporarily stagnating enterprise and workers with a high risk of long-term unemployment only, as shown in the cases of advanced countries. However, it is difficult to deny that this principle was not followed properly.
Another characteristic of the Youth New Start Project is that the vulnerable class was targeted. It is evident that the vulnerable young generation is the main target of the project, because a person with a low level of education (high school graduate or lower level), at-risk teens, and NEET(Not in Education, Employment or Training) were identified as the primary intended recipients.
However, over 60% of participants graduated from a polytech or higher educational institute. In addition, it takes about a year, on average, for a young graduate to find their first job in Korea. Considering this trend, targeting is somewhat loose, because many “ordinary”
youth are included in the policy target, considering that the judgment criteria for a long-term jobseeker is based on six months of unemployment. Of course, there is something inevitable in these criteria, considering that over 80% of high school graduates go on to college.
Lastly, the Youth New Start Project utilizes private agencies actively. About 40% of the participants were managed by a private agency. Reviewing the characteristics of the participants by operation organization, the proportion of high school or lower-level school graduates who do not go on to further schooling is large in private agencies, whereas that of long-term jobseekers is large in the public organizations, which implies that the vulnerable young generation is concentrated around private organizations.
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<Table 23> Distribution of participant characteristics (2010)
(Unit: %)
Item %
By academic background
High school graduate or lower 39.9 Polytech graduate/in school 21.6
College graduate/in school 38.5
By type
High school or lower-level school graduate who does
not go on to further schooling 33.6
Long-term jobseeker 55.4
At-risk youth 10.1
NEET 0.4 Others 0.5
Source: Recompiled from Ryu, J S et al. (2010)
<Table 24> Participant characteristics distribution by organization type (2010)
(Unit: %)
High school or lower-level school graduate who does not go on to further
schooling
Long-term
jobseeker At-risk
youth/NEET Others
Private 42.0 48.7 8.4 0.9
Public 28.4 59.5 11.8 0.3
Source: Recompiled from Ryu, J S et al. (2010)