Marginal part-time work has risen rapidly in South Korea’s labor market, driven by a policy structure in which labor costs increase sharply at 15 hours per week. Policy adjustments are needed to moderate the excessive cost differential at a specific working-hour threshold. - Among wage workers, the share of marginal part-time workers―defined as those working fewer than 60 hours per month―more than doubled, rising from 3.7% in 2012 to 8.5% in 2024. - Social insurance coverage remains low for marginal part-time workers, with few signs of improvement. - The rapid expansion of marginal part-time work means that jobs outside the worker protection framework are increasing, calling for policy attention. - Because many worker protection schemes apply only to workers with contractual hours of 60 or more per month, marginal part-time work falls within a blind spot of the worker protection framework. - The cost discontinuity at 60 hours per month creates incentives for employers to hire marginal part-time workers. - Since the 2010s, compliance with worker protection schemes for workers employed at least 60 hours per month has improved. - Improved compliance with worker protection schemes has stimulated the expansion of marginal part-time work. - Improved compliance with worker protection schemes is empirically correlated with the expansion of marginal part-time work and explains a substantial share of that increase. - Improved compliance with worker protection schemes may reflect greater public awareness and understanding of these schemes. - The labor market structure with a sharp cost discontinuity at 60 hours per month warrants adjustments. - While revisiting the weekly holiday allowance is necessary to mitigate the cost differential that encourages both marginal part-time work and long working hours, adjustments should be framed as a longer-term objective and pursued cautiously. - The following principles should guide the formulation of a policy mix: ？ set eligibility criteria in light of the overall cost structure; ？ proceed gradually and combine policy measures to mitigate adverse effects; ？ avoid placing disproportionate adjustment costs on specific groups; and ？ conduct sufficient social dialogue and institutional review.

This study examines the causes of part-time work growth in South Korea over the past decade and offers policy insights. Chapter 2 analyzes 2012-2022 data from the Additional Survey by Type of Employment of Economically Active Population Survey and the Survey of Labor Conditions by Employment Type, identifying when and which types of part-time workers increased. The growth, notable during 2016-2019, was primarily driven by older workers, part-time workers with extremely short hours (under 15 hours weekly), and service sector employees. It proposes three hypotheses: (1) workforce composition shifts, including aging and service sector expansion; (2) the adoption of a nonlinear labor cost schedule with a significant discontinuity at 15 hours per week; and (3) the minimum wage increases in 2018-2019. Chapter 3 employs DiNardo et al.’s (1996) decomposition methodology to assess the contribution of workforce composition changes to part-time work growth. Findings reveal limited explanatory power, as within-group part-time trends dominate and declining youth employment offsets rising elderly employment, suggesting institutional and policy factors as primary drivers. Chapter 4 analyzes the growth of extremely short-hour work driven by institutional factors affecting labor demand, focusing on a nonlinear labor cost schedule with a significant discontinuity at 15 hours per week (or 60 hours per month). Enhanced compliance with this institutional structure in the 2010s, measured by industry-level variations in social insurance enrollment rates for workers with 60-99 monthly hours, strongly correlates with the growth of part-time workers with very short hours, particularly among new hires. Chapter 5 conducts an event-study analysis with a continuous treatment variable of the effects of the 2018-2019 minimum wage increases on working hours distribution, finding substantial wage increases for low-wage workers but no clear causal link to the growth of part-time workers with very short hours, which follows the pre-2017 trend. Evidence suggests that this growth likely stems from sustained improvement in compliance with the nonlinear labor cost schedule analyzed in Chapter 4 rather than minimum wage increases. Chapter 6 concludes with a summary of empirical findings and offers policy recommendations to reduce discontinuities in the nonlinear labor cost schedule at 15 hours per week. Focusing on the Weekly Holiday Allowance, it outlines institutional reform directions and addresses implementation challenges.

This study was designed to explore the correct direction of development of the decent part-time job support system by looking at the background and meaning of the decent part-time job policy and analyzing the achievements and challenges so far. The decent part-time job policy began in the 2nd National Employment Strategy Meeting in 2010, where the government set a policy to spread part-time jobs and flexible working schedule compatible with workers’ family life. After that, the name of the supporting projects has been changed several times and there were a variety of changes and progress in the policy details. Above all, what has the most greatly changed is the strong commitment of government. The Park Geun-hye administration considers the decent part-time job policy as a new employment paradigm and pushes ahead with the policy as a key national issue on a cross-ministry level. According to the roadmap for employment rate of 70% by 2017, about 40% of new job creation during 2012-17 years are assumed to be part-time work. The decent part-time job policy however is still faced with lots of obstacles. Despite the strong commitment of the government, the increase of decent part-time jobs is sluggish. Comparing to the original plan, the outcome of projects was only 49.5% in 2012 and 36.2% in 2013. Public opinion is not so favorable to the decent part-time job policy. Firms worry about decreasing productivity and increasing labor costs, and workers criticize that the policy will create a millions of low quality jobs. We consider lots of reasons why the decent part-time job creation is sluggish. It might come from a shortage of the demand for part-time jobs. On the other side, it might come from the problems of the current support system such as targeting of the policy, the design of incentives, delivery systems, lack of publicity, etc. Given the potential demand for short-time work of Korean workers, the latter is more plausible. We therefore need an in-depth analysis and evaluation of the current support system, and have to find institutional complements to enhance the policy effectiveness. Furthermore, we examine whether the current support policy is designed correctly and consistently under the policy objectives and vision, whether policy enforcer and stakeholders, not only policy makers, have a good understanding of the purpose of the support policy, and whether the government does enough efforts to persuade the people to obtain a national consensus. This report evaluates the decent part-time job policy from this point of view, and suggests ways to improve.

When Korea’s fertility rate fell to 1.08 in 2005, the government implemented programs to help women find a balance between their careers and family life. It has now been more than a decade since those efforts, but Korea’s female labor force participation rate has not improved from 60%. In addition, the fertility rate, which has been on a downward trajectory, hit a record low in 2017. What types of effects do the various policies of the government have with regard to improving the fertility rate and female labor force participation rate? In Married Women’s Continued Participation in the Labor Market and Childbirth: Relevant Factors and Policy Implications (KDI Policy Forum No. 268), Inkyung Kim analyzed the current status and effectiveness of Korea’s typical work-family balance policies, focusing on maternity leave, parental leave, and shorter working hours. Kim employed the Korean Longitudinal Survey of Women and Family in this analysis. The study shows that work-family balance policies and their utilization levels are highly relevant to women’s career continuance and their plans for children. The fact that parental leave for men in Korea ranks as the longest among OECD nations whereas the income replacement ratio is relatively low may be related to why only 13.4% of those on paid parental leave are men. Maternity leave, which 84.6% of those eligible take, was found to have no significant effect on women continuing in the labor force. However, it was revealed that maternity leave raises women’s plans to have children by 3.0%p. When companies offered parental leave, it had no effect on pregnancy but raised women’s willingness to continue in the labor force by 4.0%p. On the other hand, compared to full-time jobs, part-time jobs reduced the likelihood that a woman would continue her economic activities. Nonetheless, workers who voluntarily took part-time jobs expressed stronger intentions to have children. Kim also examined the impact of women’s household burdens on childbirth and on women continuing in the labor force. It was found that a 50%p increase in men’s housework hours can be predicted to increase the likelihood that women will continue to work by 3.5%p. Yet in Korea, while the total housework hours of dual-income households have decreased, little has changed in the past decade as women are still responsible for 80% of housework.    To enhance the impact of work-family balance policies, employment insurance rate for women should be increased so that they become eligible for paid leave. In addition, Smart labor inspections should be expanded and strengthened so that workers can actually feel the effects of such policies. In the meantime, the government should make efforts to minimize employers’ negative perceptions about work-family balance policies, by promoting available subsidies. Lastly, men should be encouraged to take parental leave to enhance their participation in the home. To that end, policy measures such as providing practical incentives should be introduced.