A well-functioning labour market is essential to sustain rapid economic growth in the face of population ageing. Priorities are to reverse the rising share of non-regular workers, which has negative implications for both growth and equity, and encourage greater employment of women and youth, who are under-represented in the labour force. Attracting more women to employment requires increasing the availability of childcare, strengthening maternity leave and creating more family-friendly workplaces. Youth employment rates should be boosted by upgrading tertiary education through stronger competition and closer links to enterprises to reduce mismatches. Educational reform should be extended to elementary and secondary schools to enhance efficiency and decrease the burden of private tutoring. The age of retirement of employees should be raised by eliminating mandatory retirement and phasing out the retirement allowance. Active labour market policies should focus on policies to expand human capital rather than wage subsidies. Soutenir la croissance en Corée en réformant le marché du travail et en améliorant le système d'éducation Un marché du travail performant est indispensable au maintien d’une croissance économique rapide face au vieillissement de la population. Les objectifs prioritaires consistent à inverser l’augmentation de la part des travailleurs non réguliers, qui a des conséquences négatives à la fois pour la croissance et pour l’équité, et d’encourager une progression de l’emploi des femmes et des jeunes, qui sont sous-représentés dans la population active. Pour attirer davantage de femmes dans l’emploi, il faut accroître l’offre de services d’accueil des enfants, améliorer la situation en matière de congés de maternité et faire en sorte qu’il y ait davantage de lieux de travail où les obligations familiales sont prises en compte. Les taux d’emploi des jeunes devraient être favorisés en améliorant l’enseignement tertiaire grâce à un renforcement de la concurrence et à un resserrement des liens avec les entreprises afin de réduire les inadéquations. La réforme de l’éducation devrait être étendue aux établissements élémentaires et secondaires de façon à améliorer l’efficience et à diminuer la charge représentée par les cours de soutien privés. L’âge de départ à la retraite des salariés devrait être relevé en éliminant la retraite obligatoire et en supprimant progressivement l’indemnité de retraite. Dans le cadre des politiques actives du marché du travail, il faudrait privilégier le renforcement du capital humain plutôt que le versement de subventions salariales.Korea, dualism, female employment, employment protection, labour market, education reform, retirement allowance, company pensions, participation rates, older workers, seniority-based wages, non-regular workers, fertility rate, allocation de retraite, activité des femmes, taux de fécondité, rémunération basée sur l'ancienneté, réforme de l'éducation, emploi des jeunes, marché du travail, protection de l'emploi, travailleurs non réguliers, retraites al...

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The Korean financial system: overcoming the global financial crisis and addressing remaining problems The intensification of the global financial crisis in late 2008 led to large capital outflows from Korea and turmoil in its capital markets. However, the prompt response by the government and the central bank stabilised Korea's financial sector in early 2009 and recovery followed relatively quickly. In contrast to 1997, financial institutions have overcome the crisis without significant damage. Increased assistance for small and medium-sized enterprises has played a large role in overcoming the crisis, but should be scaled back to avoid supporting non-viable firms and to expand banks' capacity for risk appraisal, leading to a more market-oriented financial system. As a small open economy, Korea also needs to reduce its vulnerability to sudden capital outflows. In addition, it is important to use prudential regulations effectively to limit the risk of mortgage lending, upgrade the corporate governance of financial institutions and develop securitisation by ensuring transparency.

Financial stability: overcoming the crisis and improving the efficiency of the banking sector in JapanJapanese banks largely avoided the direct impact from the global financial crisis thanks to their limited exposure to foreign toxic assets, the regulatory framework in Japan and the small role of securitisation. However, the sharp contraction in output and the plunge in equity prices did have adverse impacts on the banking sector. The authorities responded with measures to stabilise the financial market, inject capital in depository institutions and sustain lending to small companies. These emergency measures should be phased out to limit distortions once the recovery is in place. It is essential to upgrade the regulatory framework by improving the transparency of securitised products, credit rating agencies and capital adequacy regulations. It is also important to address chronic problems, including low profitability, particularly in regional banks, and increase the efficiency of the financial sector. This requires a number of steps, including privatising public financial institutions, enhancing the efficiency of banking services and expanding the range and quality of financial products. This Working Paper relates to the 2009 OECD Economic Survey of Japan (www.oecd.org/eco/surveys/Japan).

The burst of the lapanese financial bubble in the early against developing regions that export primary I 990s has increased the had debts of Japan's financial commodities. Worst hit would be highly indebted institutions. Iapan accots for about 20 prcent of primary commodity exporters. T'hose with foreign aid to developing cointries and fot 10 percent of proportionately more yen-denominated debt stock would their exports, so Japan's econoiimic health is important suffer most as the yen appreciated. for their prospects. Otstubo anid 'Isntsunoi analyze the * Many Asian exporters of low-cost manufactures to sitiation, asecss the badt cteh stock, and simulate the Japan may be relatively unaffected. Iikely effecrs of crises in lapan's financial sctror. They T 'he simulation does not detect contagious effects in conclude-tlhat: tile U.S. financial market. * A irisis that would shiake Up the worldi financial * Damnage could be largely contained once the market Is Linlikely but Japanese auithoritics mnay have to monetary authority steps in to supply short-term restructure severely affected instittitions eveii without a liquidity. Small but persistent increases in tax collection crisis, which could increase fiscal spending or debt stock. from the household sector seem to be a reasonable * Even with a limited Linkrtun, the household sector's OptioIn for financing the bailout. lack of confidence in the finanecial sector woiuldl send the * Coping with such problems would leave the country into a recessionary spiral, rectuiriuig the Japanese economy in a less favorable position for Inonetdry arthorits to intervene with supplies of short-confronting the problems associated with an aging teriii iiqfidit. population. And fiscal pressures may reduce Japanese aid * A i,naniciail crisis in Japan would depress world ro low-income countries. tracde, raise interest rates, andl rLnr the terms of trade his paper-a product of thc In.ernational Economic Analysis and Prospects Division, International Economics Dcpart'Ieni-Is part of a larger effort in the departmcnt to examine chatigitig external links and the impact of external shocks on low and middle-incorme countTies. Copies of the-paper are available free from the World Bank, 1818 H Street NW, Washingtonr, I)C. 204 13. Plt ase contaict lacquielyn Queen, room N4-1 00, telephone 202-47.3-3740, fax 202-522-2 A78, Interner address jqueen(to worldbLink.org. November 1996. (5] pages) Vr ,, 'o,h ,-Res rLr W;orking 1 i,p-S'rils disseminates the findings of wuork in progress to encourage the exchange of ideas about declopmernt issues. A *je-tie of/the sf rie s 1to get the findings out qickly, even ifthe presentations are less than fully polished. The pp, rs t),-ry ile na.i;es (of th,' ii t(hors ,n! d .,ho(ilild be used an. cited accordingly. The findings, interpretations, and conclusions are the authors oun .in zshould not he attributed to the World Bank, its Fxecutii'e Board of Directors, or any of its mne mber countries.