OCDE - OECD Employment Outlook 2026 Korea

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OECD EMPLOYMENT OUTLOOK 2026: KOREA © OECD 2026

These country notes provide an overview of the labour market situation in each country based on data from OECD Employment Outlook 2026. This edition has a special focus on geographic disparities in job s and incomes. Labour markets remain resilient but risks persist The OECD labour market remains resilient, with employment and labour force participation rates at record highs (72.1% and 76.7% in Q1 2026 on average across countries, respectively) and unemployment low by historical standards ( 4.9% in May 2026). However, there are increasing signs of weakening, including rising unemployment in many countries, slowing employment growth, and easing labour shorta ges. Due to the new surge in energy prices, real wages are expected to fall in many countries. • The Korean labour market has remained resilient despite signs of weakening across the OECD. The unemployment rate stood at 2.8% i n May 2026, well below the OECD average and broadly unchanged from a year earlier. Unemployment also remains substantially below pre ‑pandemic levels (around 4%). • Employment and labour force participation have continued to increase, alth ough at a more moderate pace in recent years than during the post-pandemic rebound. The employment rate for people aged 15‑64 has risen steadily from the pandemic low to reach 70% in Q1 2026. While this remains slightly below the OECD average, labour force participation has also continue d to rise, reaching 72% in Q1 2026, around 3 percentage points (p.p.) above its pre ‑pandemic level. • At the same time, labour market tightness has eased over the past year. The number of vacancies per unemployed person fell from 0.2 in Q4 2024 to 0.17 in Q4 2025, well below the post‑pandemic peak of 0.29 reached in 2023. This suggests that labour shortages have continued to subside from

per unemployed person fell from 0.2 in Q4 2024 to 0.17 in Q4 2025, well below the post‑pandemic peak of 0.29 reached in 2023. This suggests that labour shortages have continued to subside from the elevated levels observed after the COVID-19 crisis, partly driven by weaker hiring demand. • Labour productivity growth has remained comparatively strong in Korea since the COVID-19 crisis, placing it alongside countries such as the United States, Poland and the Slovak Repu blic where productivity gains have exceeded long ‑term trends. Maintaining strong productivity growth will become increasingly important as rapid population ageing places growing pressure on labour supply and potential output over the longer term. • Real wages in Korea had largely recovered from the post ‑pandemic inflation shock before the recent rise in energy prices. By Q1 2026, real hourly wages were around 5.7% above their Q1 2021 level, making Korea one of few OECD countries where purchasing power had clearly surpassed pre‑inflation levels. Based on the assumption that disruptions stemming from the conflict in the Middle East are sizeable but limited to a relatively short period of time, OECD projection s suggest that real wages in Korea will furth er increase by 0.7% yearon-year in 2026. Real wage growth is expected to strengthen further in 2027, with real compensation projected to increase by 2.3% relative to 2026. Korea2 

OECD EMPLOYMENT OUTLOOK 2026: KOREA © OECD 2026

Real wage growth is slowing down while real wages remain below Q1 2021 levels in one-third of OECD countries Change in real hourly wages, Q1 2026

Note: “OECD” is the median of 37 OECD countries (not including Colombia).

Source: Chapter 1 in OECD Employment Outlook 2026: Geographic Disparities in Jobs and Incomes, https://doi.org/10.1787/7e710f54-en.

People’s employment prospects are shaped by where they live

Note: “OECD” is the median of 37 OECD countries (not including Colombia).

Source: Chapter 1 in OECD Employment Outlook 2026: Geographic Disparities in Jobs and Incomes, https://doi.org/10.1787/7e710f54-en.

People’s employment prospects are shaped by where they live Regional disparities in labour market outcomes are large across the OECD. In over half of OECD countries, employment rates across small regions vary by more than 20 p.p. These dispa rities do not simply reflect differences in who lives where, but also in the economic opportunities that regions have to offer, an d they translate directly into disparities in living standards. • In Korea, regional disparities in employment rates are significantly narrower than in most OECD economies: the gap between regions in the top and bottom quintiles of employment rates stand s at 6.5 p.p., compared to an average of 11.4 p.p. across countries where data are available. • Still, where people live strongly shapes their chances of finding work. In 2023, the latest year for which data are available at such granular geographical scale, the unemployment rate in the worstperforming region, Incheon, stood at 3. 2%, almost twice as that of the best-performing one, Jejudo (1.9%). • High-value-added service jobs in Korea are heavily concentrated in the region of Seoul, where they account for 21.6% of regional employment. The remaining regions, whether metropolitan or not, show much lower shares of such jobs. • Since the early 2010s, regional disparities in employment rates have narr owed by 13.9% relative to the national average, in line with most OECD countries. This reflects positi ve labour market developments in low-employment regions. 3

OECD EMPLOYMENT OUTLOOK 2026: KOREA © OECD 2026

Regional disparities in employment are large in most OECD countries Employment rates across small regions, 2024 or latest available year

developments in low-employment regions. 3

OECD EMPLOYMENT OUTLOOK 2026: KOREA © OECD 2026

Regional disparities in employment are large in most OECD countries Employment rates across small regions, 2024 or latest available year

Source: Chapter 2 in OECD Employment Outlook 2026: Geographic Disparities in Jobs and Incomes, https://doi.org/10.1787/7e710f54-en.

Non-compete clauses are widespread beyond high-skill occupations Non-compete clauses (NCC) – contract terms that prevent workers from moving to a competitor or starting a competing business – and related contractual restrictions are widespread across OECD labour markets. they covered about 30% of workers in 2025 and are increasingly used beyond highl y specialised jobs. While firms may use such clauses to protect trade secrets or investments, evidence sugg ests they can reduce job mobility, weaken wage growth, slow knowledge diffusion and undermine productivity growth. • In Korea, according to employers, between 25% and 35% of private-sector employees are currently bound by a non-compete agreement, compared with an average of 20% to 30% across the surveyed OECD countries. • Firms in Korea also report an upward trend in the use of non‑compete clauses, suggesting growing reliance on contractual restrictions in the labour market. • As in several other OECD countries, non ‑compete clauses in Korea extend well beyond highly specialised occupations where the traditional justification – protecting sensitive information or highvalue investments – appears strongest. Between 16% and 41% of workers without access to confidential information report being covered by a non ‑compete clause, as do between 5% and 37% of low‑paid workers. • In addition, about 65% of surveyed firms report knowledge of either no-poaching agree ments, wage-fixing arrangements, or both occurring within their industry, compared with 4 8% on average across the surveyed countries. • The comparatively widespread use of these contractual rest rictions may weigh down on labour

• In addition, about 65% of surveyed firms report knowledge of either no-poaching agree ments, wage-fixing arrangements, or both occurring within their industry, compared with 4 8% on average across the surveyed countries. • The comparatively widespread use of these contractual rest rictions may weigh down on labour mobility and wage growth, potentially slowing knowledge diffusion and productivity growth over time.4 

OECD EMPLOYMENT OUTLOOK 2026: KOREA © OECD 2026

Share of employees bound by non-compete clauses as reported by employers

Source: Chapter 5 in OECD Employment Outlook 2026: Geographic Disparities in Jobs and Incomes, https://doi.org/10.1787/7e710f54-en.

Contact Ha-Young JEON ( ha-young.jeon@oecd.org) Glenda QUINTINI ( glenda.quintini@oecd.org) 5

OECD EMPLOYMENT OUTLOOK 2026: KOREA © OECD 2026

This work is issued under the responsibility of the SecretaryGeneral of the OECD, and does not necessarily reflect the official views of OECD Member countries. This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. Note by the Republic of Türkiye The information in this document with reference to “Cyprus” relate s to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Türkiye recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable so lution is found within the context of the United Nations, Türkiye shall preserve its position concerning the “Cyprus issue”.

single authority representing both Turkish and Greek Cypriot people on the Island. Türkiye recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable so lution is found within the context of the United Nations, Türkiye shall preserve its position concerning the “Cyprus issue”. Note by all the European Union Member States of the OECD and the European Union The Republic of Cyprus is recognised by all members of th e United Nations with the exception of Türkiye. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.

The full book is available in English: OECD (2026), OECD Employment Outlook 2026: Geographic Disparities in Jobs and Incomes, OECD Publishing, Paris, https://doi.org/10.1787/7e710f54-en.

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OECD 2026

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