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Release of medium-to-long term outlook on respective agenda based
on the analysis of pending macroeconomic issues

Labor and Education

Policy Study

A Study on the Causes of Long-Term Unemployment, Effect of Vocational Training and Schemes to mprove Vocational Training

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SUMMARY This study examines the possible role of vocational training as an effective policy response to long-term employment, and explores the causal impact of vocational training and schemes to improve it. Using Economically Active Population Survey, we find that the duration of the unemployment have become longer since 2000. Examining the cause of the long-term unemployment hints that, the vocational training could serve as effective measure for reducing the average duration of unemployment. Despite positive impacts vocational training might have on unemployment, the effectiveness of current vocation training in Korea is rather disappointing. In particular, using Employment Insurance DB, we fail to find the supportive evidence that the vocational training increases the chance of employment of trainees. The lack of effectiveness of vocational training is partly due to the short-term and cheap training courses. This study suggests that the provision of programs with sufficient training time and costs meeting high quality is crucial for the effectiveness of the vocational training programs.
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