There is an anti-cyclical relationship between economic fluctuations and the non-economically active population, but those youths who experienced the economic recession and trough around 2005 became economically inactive; they pursued further education, focused on gaining qualifications, or became discouraged workers. This may have reflected youths’ expectations of employment, which has been affected by the country’s economic situation.
If this proliferation of youth human capital continues due to economic fluctuations but the economy fails to create enough jobs, the oversupply of labor may intensify going forward.
To raise youth employment, the government needs to take short-term measures such as pump priming and implement policy innovations such as greater flexibility of the labor market in order to help the market enhance its job creation capabilities.
Attention needs to be paid to the economic cycle and the dynamic decision-making of youths, and systematic policy measures should be developed to support human capital buildup so that youths can enter the labor market with positive expectations.