2026 Economic Report: A Survival Guide for Ordinary People

Early School Dismissal and Expensive Tutoring? How Much Can After-School Care Reform Save?

In South Korea, the statutory classroom teaching hours for primary education are relatively short, at only 655 hours per year, below the OECD average of 804 hours. This shorter regular school schedule leads to early afternoon dismissals, creating a practical childcare challenge for dual-income families who have no time to look after their children. To fill the after-school time gap, many families have to rely on private off-campus tutoring and childcare services.

Overreliance on off-campus tutoring and childcare has directly increased the daily financial burden on ordinary families. Research report data shows that students’ average monthly spending on off-campus tutoring has continued to grow, reaching about 10% of the average household disposable income in 2024. High extracurricular education costs not only add to financial pressure but also exacerbate parenting anxiety among families.

To address the issues of early dismissal and expensive tutoring, public policy is accelerating the expansion of on-campus after-school care and educational support systems. Since 2024, the scope of before- and after-school care services at the primary level has been significantly expanded, with school-community partnerships set to deepen further in 2026. These measures aim to extend the time students spend under school care and provide a rich curriculum covering a variety of interests.

Research reports indicate that high-quality on-campus after-school care can effectively reduce the demand for private off-campus tutoring, thereby lowering families’ tutoring expenditures. Improvements in the coverage and quality of public childcare help parents cut unnecessary spending on off-campus institutions. This not only helps alleviate the financial burden of child-rearing but also provides tangible support for balancing work and family life.

Is AI Coming for Your Job? How Young Workers Entering the Workforce Should Respond

With the accelerated adoption of artificial intelligence technology, the demand for human skills in the workplace is undergoing profound changes. Research reports point out that in industries with high AI exposure, such as computer programming, information services, and research and development, job creation has primarily benefited mature workers over the age of 30, while the younger demographic aged 29 and under faces the challenge of job displacement. Since the introduction of generative AI tools, there has been a clear trend of slowing job creation for young people. This phenomenon indicates that emerging technologies have had a direct impact on quality employment opportunities for young people just entering the workforce.

The core reason for this phenomenon lies in the difference in the nature of work tasks between junior and senior employees. Young people just entering the workforce typically take on more routine tasks that are standardized, based on textbook knowledge, and follow fixed procedures—precisely the areas where AI can execute quickly and efficiently. In contrast, senior employees possess tacit knowledge, social coordination skills, decision-making judgment, and organizational management experience that are difficult for AI to replace. If junior employees rely solely on traditional textbook knowledge and lack practical skill accumulation, they are highly vulnerable to the risk of job replacement in the wave of automation.

At the same time, corporate recruitment models are also shifting, with routine hiring increasingly favoring experienced employees who can hit the ground running. The proportion of traditional entry-level hiring channels, such as regular unified recruitment exams, has declined, further increasing the difficulty for young people to secure quality entry-level positions. However, in the long run, companies still need to continuously attract and cultivate young talent to ensure the succession and development of their talent pipeline. To adapt to these changes, market demand for advanced skills in data analysis and interpretation, as well as soft skills like interpersonal communication, is rising rapidly.

To address the risk of job displacement brought about by AI, the government is increasing its support for the reskilling and career development of young workers. For example, official AI talent development programs have been launched, focusing on providing AI-related skills and capacity-building training for young people at risk of technological disruption. Meanwhile, through special initiatives such as youth employment security programs, personalized career assistance and subsidy support are being provided to young job seekers. For young workers, shifting from merely executing standardized tasks to cultivating critical thinking, practical learning abilities, and AI collaboration skills is the key path to coping with technological change.

Will Pension Contributions Increase? Future Retirement Age and the Pension Ledger

Reforms surrounding the National Pension determine the monthly payroll deductions for ordinary workers and their future retirement security. The latest reform gradually increases the National Pension contribution rate from the original 9% to 13%, while slightly adjusting the income replacement rate to 43%. Although these measures improve the fund’s long-term financial health and push the projected depletion date to the mid-2060s, they also mean that employed workers will have to bear a higher proportion of social security contributions.

Besides the increase in contribution rates, when retirees can start receiving their pensions is also a core issue of widespread concern. South Korea’s current statutory pension eligibility age is 63, with plans to gradually raise it to 65 by 2033, while the upper age limit for ceasing pension contributions is currently 60. The research report recommends further accelerating the pace of adjustment by raising the statutory eligibility age to 68 before 2035, linking the age for ceasing contributions to the eligibility age, and implementing dynamic linkage in the future based on increases in life expectancy.

In actual workplace conditions, workers often face the awkward dilemma of leaving their jobs earlier than the statutory retirement age. Because companies generally adopt seniority-based pay systems, many professionals encounter mandatory ‘honorary retirement’ or are forced to transfer to different positions around the age of 50. If the statutory pension eligibility age is delayed while early retirement practices within companies persist, workers will experience a longer income gap between losing their primary employment income and receiving their pensions.

To eliminate this income gap, the research report advocates reforming the seniority-based wage system and gradually transitioning to a compensation model based on job responsibilities and work performance. At the same time, the report suggests abolishing or gradually postponing the mandatory retirement age limits within companies, encouraging businesses to retain experienced older workers. Matching extended careers with delayed pension eligibility ages will not only increase individuals’ pension accumulation but also effectively alleviate the pressure on the social pension security system.

High Deed Taxes for Buying and Trading Homes? The Impact of Shifting the Real Estate Tax System to Holding Taxes

In many home buying and trading processes, high transaction taxes and fees are often heavy costs that homebuyers cannot avoid. Data from the research report shows that real estate-related taxes account for 11.7% of total tax revenue, indicating an extremely high reliance on property taxes. Among these real estate taxes, transaction-stage taxes such as deed taxes account for as much as 50.4%, while annual holding-stage taxes make up only 29.4%, presenting a very clear characteristic of being heavy on transactions and light on holding.

The high tax burden in the transaction stage directly raises the threshold for homebuyers to move and trade homes, suppressing normal housing mobility. For example, when buying a home, in addition to paying the basic deed tax, buyers may be subject to higher surtax rates if they own multiple properties. This high taxation targeting transaction behavior forces many families to bear enormous financial friction costs when facing job changes or needing to improve living conditions due to family expansion.

Addressing this distorted structure, the research report recommends pushing the tax system toward lowering transaction taxes and shifting to holding taxes, reducing the burden of trading homes while maintaining overall tax neutrality. By lowering transaction-stage tax rates such as deed taxes, the cost of home transfers can be effectively reduced, promoting labor mobility and efficient resource allocation. Meanwhile, holding-stage taxes will gradually shift to being levied based on the market value of properties to create a fairer and more rational market environment.

For ordinary readers who hold owner-occupied homes long-term, this transition does not mean a simple increase in the overall tax burden. Policy recommendations suggest providing reasonable protections for sole owner-occupied homes while levying relatively higher holding tax rates on vacant homes or non-primary residences to promote the effective utilization of real estate resources. This reform approach aims to guide the real estate market back to its residential attributes, allowing buyers with actual needs to trade and live to enjoy lower transaction thresholds.

Crowd into the Capital Region or Move to the Provinces? Urban Living Costs and New Development Choices

Excessive concentration in the metropolitan area, while providing concentrated economic opportunities and high-quality jobs, has also brought heavy living costs. The report points out that high housing prices and traffic congestion in the metropolitan area have significantly driven up the cost of living; in 2025, only about 7% of housing in Seoul was affordable for middle-income families. Meanwhile, the stress of long commutes and expensive housing costs have directly delayed young people’s marriage and childbearing plans, resulting in extremely low fertility rates in the metropolitan area.

In contrast, non-metropolitan areas, despite having a relatively relaxed living environment, have long faced the challenges of young workforce outflow and strained public services. Because high-quality jobs and premium healthcare and educational resources are highly concentrated in the metropolitan area, people aged 15 to 29 continue to migrate there, further widening the regional gap in wages and development. This one-way population flow not only exacerbates the shrinkage of local cities but also leaves residents who stay behind facing the practical dilemma of dwindling healthcare and care facilities.

To break this vicious cycle of regional imbalance, public policy is shifting towards cultivating regional central cities and enhancing the residential and employment appeal of local areas. The report shows that the policy focus is on selecting regional hub cities with service radiation capabilities, centrally allocating healthcare, commercial, and industrial facilities, and creating a one-hour living circle. By connecting transportation networks with core hubs, local residents can enjoy convenient public services and employment opportunities without having to crowd into the metropolitan area.

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Source institutions：OECD

This content is for reading and understanding research reports. It does not constitute investment advice or trading signals.