Over the past four years, youth employment has significantly declined in sectors with high exposure to artificial intelligence (AI). The decrease in new hires, coupled with an increase in the departure of existing young workers, has weakened the career ladder for young people entering the workforce and gaining experience.
The Bank of Korea's Employment Research Team analyzed these trends in a report titled 'BOK Issue Note: Youth Employment Contraction, Is AI to Blame? Changing Career Ladders and Response Challenges,' released on August 18.
According to the report, the number of employed youth aged 15 to 29 fell by 285,000 from June 2022 to June 2023. Of this total, 268,000 jobs were lost in sectors with high AI exposure, accounting for 94.0% of the overall decline in youth employment. In contrast, employment among individuals in their 50s increased by 230,000 during the same period, with 173,000 of those jobs (75.2%) also in high AI exposure sectors.
The decline in youth employment was particularly pronounced in high AI exposure industries. Employment in the information services sector dropped by 31.4%, while publishing saw a 27.4% decrease, computer programming and systems integration and management fell by 16.6%, and professional services decreased by 11.6%.
The Bank of Korea explained that the age-related disparity may be due to AI's impact on entry-level jobs. Oh Sam-il, head of the Employment Research Team, stated, 'AI primarily handles tasks that are manual, which can replace young workers. Senior roles often require an understanding of the organization's context and specialized tasks, making them harder for AI to replace.'
The impact of AI on youth employment varied depending on how it was utilized. Industries that heavily relied on 'automation,' where AI was tasked with performing jobs, experienced significant declines in youth employment. However, sectors that employed 'augmentation,' where AI assisted with existing tasks like drafting or verification, did not show the same pattern.
The decline in youth employment was not limited to new hires. In high AI exposure sectors, the departure of existing young workers also increased. A comparison by the Bank of Korea between January 2016 to December 2019 and July 2022 to June 2026 revealed that the average monthly outflow of young workers in high AI exposure sectors rose from 3,700 to 4,900, an increase of about 32%. Meanwhile, the average monthly inflow decreased from 32,600 to 29,100, a drop of about 11%. This indicates a reduction in new entrants and an increase in the departure of existing workers.
However, the Bank of Korea cautioned against attributing these trends solely to AI. They noted that the normalization of hiring, which had surged during the COVID-19 pandemic, along with companies' preference for experienced workers, reduced internal training, and weakened long-term employment relationships, may also play a role. The rise of remote work may have further diminished informal learning opportunities for junior employees and reinforced the preference for experienced workers.
Moreover, the combination of AI and remote work may have accelerated the weakening of the existing career ladder. Jobs that allow for remote work often overlap significantly with those in high AI exposure sectors. As remote work makes it harder for juniors to develop skills, repetitive tasks that were once performed in the office have become standardized and modular, making them easier for AI to automate.
The Bank of Korea stated, 'It is more appropriate to understand that AI has accelerated the existing weakening of the career ladder rather than being the sole cause.'
The outlook for youth employment remains uncertain. The Bank of Korea believes that while the initial spread of AI has impacted the youth, they may adapt more quickly to AI utilization and new technologies, potentially becoming beneficiaries of AI expansion in the long run. They suggest that improvements in productivity due to AI could expand labor demand and create new career development pathways.
Consequently, they recommend that policies should shift from merely preserving existing jobs to redesigning the youth career ladder to align with the AI era. This includes the need for vocational training that combines actual work with AI utilization and guidance from skilled professionals, rather than short-term training on how to use AI. They also proposed supporting companies with mentoring and training costs and introducing 'career development support funds' linked to performance, such as job retention.
* This article has been translated by AI.
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