KDI Policy Forum How to Save Local Communities Where Young People Are Leaving? September 22, 2022
Series No. No. 290 (2022-05), eng.
KDI Policy Forum
How to Save Local Communities Where Young People Are Leaving?
#Demographics
#Employment·Unemployment
#Higher Education
#Urban, Rural and Regional Economics
September 22, 2022
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Joseph Han
프로필
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Seoul Republic... Half of the population is in the metropolitan area,
I'm sure you've heard it a lot. young people to the Seoul metropolitan area
The sooner you leave, the sooner the fat will dissipate,
How can young people seriously consider living in rural areas?
Author: Han Joseph, Fellow at KDI
#SeoulRepublic #Local extinction #Aging #Population concentration
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The capital region has seen an influx of approximately 70,000 young adults in their 20s over the past year, while non-capital regions continue to experience a decline in population, leading to a rapid acceleration in population aging in those areas.
The primary factors driving this concentration in the capital region are higher education opportunities and job prospects.
Our analysis of cross-regional migration of young adults reveals that various factors influence their location choices at various stages in their lives.
When starting university, factors include moving distance, whether the university is located in Seoul, regional admission quota, and high school grades necessary for university entrance.
Upon entering the labor market, factors shift to moving distance, job distribution, and their hometown location.
University admission quota in South Korea are relatively inflexible, so a change in the number of high school graduates in a particular region can impact the region in which they enter university.
Does attending a university in a different region impact employment choices?
Our analysis reveals that with a rise in high school graduates and unchanged university admission quotas in the capital region, the number of students involuntarily entering non-capital universities grows.
Recent data reveals a growing trend of students choosing not to pursue higher education rather than attending non-capital universities.
This has led to a decline in university enrollment among capital-region high school graduates.
Upon graduating from universities in non-capital regions, 88% of capital region high school graduates are found to return to the capital region.
If the economy of the region where they graduated from university worsens and its unemployment rate increases by 1%p, the likelihood of their returning to the capital region to seek employment is found to increase by 6%p.
In an effort to address the concentrated migration of young adults to the capital region, the government has implemented various programs supporting local universities and companies.
To determine the most effective approach, we conducted a policy simulation.
Firstly, in a scenario where local universities receive subsidies for tuition or dorm fees, the probability of young adults attending local universities is found to increase by 0.8%p. However, most of this effect seems to dissipate when they are employed.
In contrast, when the same amount of financial support is provided to local companies in the form of wage subsidies and tax credits, young adults are 7%p more likely to work in non-capital regions and 0.5%p more likely to choose a local university.
In summary, with a limited budget, supporting employment in non-capital regions could be more effective in addressing the concentration of young adults in the capital region than subsidizing university education in non-capital regions.
Policy efforts to maintain local populations are vital and urgent. However, considering youth employment challenges, it is essential to balance policies supporting local areas and young adults.
It's time to restructure youth job policies nationwide to boost incomes for young adults in non-capital regions.
Additionally, local university support policies should prioritize enhancing education quality, research, university values, and community connections, rather than solely preventing youth outflow.
- Summary
- As young people are increasingly concentrated in the Seoul Capital Area (SCA), there is growing interest in policies for supporting young people to settle outside of the SCA; however, a better understanding of young people’s location choice is a prerequisite for policy effectiveness.
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- The growing presence of young adults in their late 20s and early 30s in the SCA since 2015 requires empirical investigations of the determinants of their location choice.
This study empirically analyzes the residential location choice of young people at two distinctive stages---college education and labor market entry---and finds that the policy intervention at the stage of college education is ineffective, while more visible impact is observed for the policy intervention at the stage of labor market entry.-
- When high school graduates in the SCA had to out-migrate to a non-SCA region for higher education due to an exogenous demographic shock, most of them eventually returned to the SCA at the later job-search stage. The deterioration of local economic conditions at graduation also resulted in the increased return moves to the SCA.
- Simulations from a two-stage locational choice model that estimated from micro data show that wage subsidies are more cost-effective than educational subsidies for the settlement of young people in the non-SCA areas.
Policies for youth require a nationally-coordinated design, considering the impact on location choice, and policies for local higher education should focus on the original goals, not the supplemental goal of mitigating youth outflows.-
- Policies for youth need to be better designed in consideration of regional circumstances so as not to encourage youth migration to the SCA. In particular, policy alternatives targeting subsidies and tax benefits for local youth workers are needed.
- The policy for local higher education needs to prioritize improving the quality of education and research functions and strengthening the tie with the local community.
- Summary
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■ As young people are increasingly concentrated in the Seoul Capital Area (SCA), there is growing interest in policies for supporting young people to settle outside of the SCA; however, a better understanding of young people’s location choice is a prerequisite for policy effectiveness.
- The growing presence of young adults in their late 20s and early 30s in the SCA since 2015 requires empirical investigations of the determinants of their location choice.
■ This study empirically analyzes the residential location choice of young people at two distinctive stages---college education and labor market entry---and finds that the policy intervention at the stage of college education is ineffective, while more visible impact is observed for the policy intervention at the stage of labor market entry.
- When high school graduates in the SCA had to out-migrate to a non-SCA region for higher education due to an exogenous demographic shock, most of them eventually returned to the SCA at the later job-search stage. The deterioration of local economic conditions at graduation also resulted in the increased return moves to the SCA.
- Simulations from a two-stage locational choice model that estimated from micro data show that wage subsidies are more cost-effective than educational subsidies for the settlement of young people in the non-SCA areas.
■ Policies for youth require a nationally-coordinated design, considering the impact on location choice, and policies for local higher education should focus on the original goals, not the supplemental goal of mitigating youth outflows.
- Policies for youth need to be better designed in consideration of regional circumstances so as not to encourage youth migration to the SCA. In particular, policy alternatives targeting subsidies and tax benefits for local youth workers are needed.
- The policy for local higher education needs to prioritize improving the quality of education and research functions and strengthening the tie with the local community.
- Contents
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1. 청년층의 수도권 집중 심화
2. ‘지방소멸’ 대응정책
3. 진학 및 취업 단계에서의 지역 간 이동
4. 진학 및 취업 단계에서의 지역 간 이동의 연계성 분석
5. 구조모형을 통한 정책 시뮬레이션
6. 정책적 시사점
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