South Korea is expected to face a deceleration in its economic growth, mainly due to a significant reduction in its labor force, resulting from an exceptionally low fertility rate and a rapidly aging population. In response, some have proposed bolstering the country’s labor market by encouraging the participation of older individuals to mitigate the labor shortage. The effectiveness of this strategy depends on the extent to which the labor provided by older workers can substitute for the diminishing younger workforce. Despite numerous studies on this subject, there is still no clear consensus on the degree of substitutability between the two age groups. Furthermore, the mechanism determining whether different age groups are substitutes or complements in the labor market has not been extensively explored.

This study investigates the contributions of older workers to production and their substitutability with younger workers by analyzing the tasks performed in their jobs. These tasks provide rich information on the nature of work across various occupations, classified into five categories in this study: analytical, social, service, routine, and manual. This study assesses the intensity with which these tasks in each occupation and calculates a task-age profile to observe how task composition shifts as workers age. The findings reveal that older workers are more likely to engage in occupations with a lower intensity of analytical and social tasks but a higher intensity of routine and manual tasks. Interestingly, the shift in task composition with age is less pronounced among female workers, particularly in social and service tasks.

The study also examines age-related task heterogeneity that emerges when workers switch jobs following a period of unemployment. An event study demonstrates that the impact of unemployment significantly varies with age. Workers who became unemployed before the age of 50 did not show marked changes in the intensity of analytical and social tasks in their subsequent jobs. In fact, early-career unemployment actually increased the intensity of these tasks. Conversely, individuals employed after 50 tended to move jobs with a substantially lower intensity of analytical and social tasks compared to their previous jobs. Such trends suggest that later-career unemployment increases the likelihood of obtaining a job with a significantly different task composition, often lower on the occupational ladder. The event study also reveals a gender disparity: post-50 unemployment did not reduce the intensity of social tasks among female workers.

This study reveals significant task segregation in the South Korean labor market, showing the substitutability between older and younger workers heavily depends on the task composition of various occupations. The key findings suggest that it may be challenging for older workers to replace younger ones in occupations requiring intensive analytical and social tasks. Additionally, the analysis indicates that age-related task segregation often results from significant shifts in task requirements when older workers transition to new jobs. Therefore, mitigating task segregation and enhancing the substitutability between different age groups necessitates strategies to prevent premature retirement and expand employment opportunities for older job seekers.

Preface
Executive Summary

Chapter 1 Introduction

Chapter 2 The Current Status of the Older Workforce: A Generational Comparison
　Section 1 Changes in Employment Rates
　Section 2 Changes in Occupational Status and Working Hours
　Section 3 Changes in Tenure
　Section 4 Changes in Industry, Occupation, and Wage Levels

Chapter 3 Analysis of Lifecycle Tasks
　Section 1 Understanding the Data and Tasks
　Section 2 Estimating Age-Task Profiles
　Section 3 The Impact of Unemployment on Tasks

Chapter 4 Conclusions and Policy Implications

References
Appendix
ABSTRACT