Young S. Koreans face double strain from longer job searches, rising housing costs

▲ Job seekers visit a job fair in Seoul on Dec. 2, 2025. (Yonhap)

BOK-youth

Young S. Koreans face double strain from longer job searches, rising housing costs

SEOUL, Jan. 19 (Yonhap) -- Longer job searches and rising housing costs are intensifying economic pressure on young South Koreans amid the country's structural challenges and sluggish growth, a central bank report said Monday.

According to a report on youth economic conditions released by the Bank of Korea (BOK), many young job seekers are experiencing prolonged job searches early in their careers as companies increasingly favor experienced workers and expand rolling recruitment, rather than the traditional large, scheduled recruiting, amid sluggish economic growth.

Those who remain unemployed for one year have a 66.1 percent chance of securing a regular job five years later, but the probability drops to 56.2 percent if unemployment lasts three years.

Each additional year without a job was estimated to reduce current real wages by 6.7 percent due to a lasting "scarring effect," the report said.

The situation mirrors Japan's so-called employment ice age generation or lost generation, which entered the labor market during the country's prolonged economic stagnation in the 1990s and early 2000s, the BOK noted.

Rising housing costs are adding to the burden.

Young adults, who typically live in rental housing for school or work, are facing markedly higher monthly rents amid a shortage of small, non-apartment units, leading to a deterioration in housing conditions.

The share of young people living in sub-standard housing rose to 11.5 percent in 2023 from 5.6 percent in 2010, according to the report.

A 1 percent increase in housing costs was estimated to reduce total assets by 0.04 percent, while the share of youth debt in overall household debt surged to 49.6 percent in 2024 from 23.5 percent in 2012, it showed.

"The employment and housing challenges facing young people are structural issues that constrain the country's long-term growth," BOK official Lee Jae-ho said. "Labor market reforms are needed to reduce job polarization, while the expansion of the supply of small homes is required to ease housing imbalances."

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