Raising the level of skills through education and training, and ensuring their diffusion, to meet the skill demands of the labour market is becoming an imperative for policymakers in OECD countries thinking about sustainable growth and development. In Korea, policymakers have looked beyond secondary school, focusing on tertiary education as a way to fill the skill gap created by the rapidly growing demand for technical and professional jobs in the wake of the financial crisis in 1997. The over expansion of higher education and Korea’s fast aging population has led to a shortage of skills and a mismatch in the labour market. In response, Korea has recognised the importance of post-secondary vocational education and training (VET) which can play a critical role in retooling and upgrading the skills of the labour force.
This paper consists of two main parts: the formation and diffusion of skills. These two areas are related to the supply and demand of skills, and depend on each other to transmit the right skill signals in the labour market. The paper analyzes the formation of skills in the post-secondary VET setting and the skill demands of the labour market under one unified framework. It will emphasize the linkage between post-secondary VET and the labour market. The paper is presented in four parts: challenges and needs of the labour market; the formation of skills; the transmission of skill signals; and policy issues.
There are many big challenges in matching the supply and demand of skills in the labour market, three of which include: meeting the demand for high skilled jobs, the expansion of higher education amid high youth unemployment, and declining population. These issues are the most significant trends affecting the development of skills in Korea.
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