Employment policy and retirement age extension for older worker: Focusing on the social welfare service industry

Abstract

This study examined the possibility of introducing a system to extend the retirement age to 65, which is necessary for increasing the low employment rate of the elderly, which is the main cause of the elderly poverty rate, and for successful reform of the national pension system, and its impact on the social welfare service industry. For the purpose of this study, the current status of retirement system operation in Korea and foreign countries, the scale of benefits and intergenerational job substitution when introducing an extension of retirement age to 65, and the possibility of changes in the demand and supply of social welfare service industries were analyzed through various administrative statistics and surveys. The analysis results show that, first, the retirement system is not applied to workplaces with less than 5 employees, which have many elderly workers, and although the government is operating a retirement system introduction support project, the scale of benefits is small. Second, while foreign countries have introduced work incentive policies to maintain employment rates when reforming pensions, Korea does not have any. Third, when calculating the scale of the extension of the retirement age to 65 using employment insurance statistics, it was very small compared to the number of employed people, and job substitution between generations was also found to be low. Fourth, while the change in demand for social welfare services due to the extension of the retirement age is small, there is a possibility of job creation in the social welfare service industry on the supply side. However, sustainability is decreasing due to wage increases.