Seoul: Longer job searches and rising housing costs are intensifying economic pressure on young South Koreans amid the country's structural challenges and sluggish growth, a central bank report said Monday.

According to Yonhap News Agency, a report on youth economic conditions released by the Bank of Korea (BOK) highlights that many young job seekers face prolonged job searches early in their careers. This is attributed to companies increasingly favoring experienced workers and expanding rolling recruitment, rather than the traditional large, scheduled recruiting, amid sluggish economic growth.

The report indicates that individuals remaining unemployed for one year have a 66.1 percent chance of securing a regular job five years later, but this probability drops to 56.2 percent if unemployment lasts three years. Each additional year without a job is estimated to reduce current real wages by 6.7 percent due to a lasting "scarring effect."

The situation draws parallels to Japan's "employment ice age generation" or lost generation, which entered the labor market during prolonged economic stagnation in the 1990s and early 2000s, as noted by the BOK.

Rising housing costs further exacerbate the burden. Young adults, typically residing in rental housing for school or work, face significantly higher monthly rents amid a shortage of small, non-apartment units, deteriorating housing conditions. The report reveals that the share of young people living in sub-standard housing rose to 11.5 percent in 2023 from 5.6 percent in 2010.

A 1 percent increase in housing costs is estimated to reduce total assets by 0.04 percent. Additionally, the share of youth debt in overall household debt surged to 49.6 percent in 2024 from 23.5 percent in 2012.

BOK official Lee Jae-ho emphasized that "the employment and housing challenges facing young people are structural issues that constrain the country's long-term growth." Lee suggests that labor market reforms are necessary to reduce job polarization, while an expansion in the supply of small homes is required to ease housing imbalances.