The government plans to raise the job-seeking promotion allowance paid to vulnerable job seekers to 650,000 won per month. The move aims to strengthen the safety net easing job seekers' living cost burdens as the employment market freezes, particularly for young people.
"We are pushing to raise the job-seeking promotion allowance as part of implementing national policy tasks," a Ministry of Employment and Labor official said on the 9th. "We are in consultations with the Ministry of Planning and Budget on the matter."
The job-seeking promotion allowance is paid to participants in Type I of the National Employment Support Program. The program is Korea's unemployment assistance scheme that provides both employment support services and living expenses to vulnerable groups, such as low-income individuals and young people, who fall outside employment insurance coverage.
The allowance has already been raised once. The Type I job-seeking promotion allowance rose from 500,000 won per month last year to 600,000 won per month this year. The number of recipients also increased from 305,000 to 350,000. This year's budget for the National Employment Support Program is 1.0128 trillion won.
The additional increase the government is pursuing is 50,000 won per month. Since the allowance is paid for up to six months, raising it to 650,000 won per month would increase total support per person by 300,000 won. A simple calculation applying the increase to all 350,000 recipients this year puts the additional cost at up to 105 billion won.
The actual fiscal burden could vary depending on the scope of recipients and payment duration. If the increase applies mainly to certain vulnerable groups such as young people, or if payments are cut off when recipients find jobs midway, the final cost would fall. The scale of the increase is expected to be determined through consultations between the government and budget authorities.
Behind the discussion lie deteriorating employment indicators. Declines in employment have been pronounced this year, particularly among young people and in manufacturing. Analysts say barriers to labor market entry have risen as raw material cost burdens from the prolonged Middle East war, sluggishness in the automobile and machinery sectors, and pressure for industrial restructuring driven by the spread of artificial intelligence (AI) have converged.
According to the National Data Office, the number of employed young people aged 15 to 29 stood at 3.427 million in May this year, down 255,000 from a year earlier. Youth employment as of May fell from 4.104 million in 2022 to 3.427 million this year, a decrease of 677,000 over four years. Over the same period, the youth employment rate fell 4.0 percentage points from 47.8% to 43.8%.
The government views youth job-seeking support as a core pillar of its employment policy. The '2026 Youth Policy Implementation Plan' announced this year includes expanded support for young people's 'first jobs' and 'getting back on their feet.' It also includes strengthening job-seeking support for 'resting youth' and providing work experience to some 45,000 people through public-private collaboration.
However, it remains uncertain whether expanded cash support will translate into employment outcomes. The Korea Institute of Public Finance said in a report last year that it "found no statistically significant effect" after analyzing the impact of the National Employment Support Program's introduction and operation on young job seekers' probability of finding employment.
The report pointed to the weak link between allowance payments and employment support services as a limitation. If the program operates centered on living expense support rather than job placement or vocational training, its function of connecting job seekers to actual jobs could weaken, the report said.
"Empirical evidence on the National Employment Support Program's impact on job seekers' labor market outcomes has not been sufficiently accumulated," the institute said. "Caution is needed in expanding beneficiaries and raising benefits without first substantiating the program's operation."
