TLDR: A recent report from the Bank of Korea reveals a significant shift in the nation’s job market, attributing a decline in youth employment and a rise in jobs for individuals in their 50s to the increasing diffusion of artificial intelligence. The study indicates that AI is replacing standardized tasks often performed by younger workers while complementing roles requiring experience and tacit knowledge.
The Bank of Korea (BOK) has released a comprehensive report titled ‘BOK Issue Note: AI Diffusion and Youth Employment Contraction, Focusing on Seniority-Biased Technological Change,’ shedding light on the transformative impact of artificial intelligence on South Korea’s labor landscape. The study, published on October 30, 2025, indicates a stark generational polarization in employment trends over the past three years.
According to the BOK’s analysis, youth employment (ages 15–29) experienced a substantial decrease of 211,000 jobs. A significant portion of this decline, 208,000 jobs, occurred in industries identified as having high exposure to AI. Conversely, the report highlights a notable increase in employment for those in their 50s, with 209,000 new jobs created, of which 146,000 were within AI high-exposure sectors.
The central bank attributes this phenomenon to the nature of AI technology. It explains that AI is particularly adept at replacing ‘standardized, textbook-based knowledge tasks’ that are typically performed by younger, less experienced workers. In contrast, AI tends to ‘complement tasks requiring experience-based tacit knowledge and social skills,’ which are more prevalent among middle-aged and older employees.
Specific sectors have been disproportionately affected by these shifts. Youth employment saw significant decreases in information services (23.8%), publishing (20.4%), computer programming, systems integration, and management (11.2%), and professional services (8.8%). These industries are characterized by high AI exposure, suggesting that AI has acted as a substitute for youth labor rather than a complement.
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The report also delved into the impact on work hours across different educational levels due to AI adoption. Master’s degree holders experienced the highest work-hour reduction rate at 7.6%, followed by four-year college graduates (5%), doctoral degree holders (3.7%), two- to three-year college graduates (3.4%), and high school graduates (0.8%). Oh Sam-il, head of the Bank’s Employment Research Team, commented during a press briefing, ‘While reduced work hours from AI may boost productivity, it will eventually replace human labor. Employment among youth in their 20s with four-year degrees or master’s degrees is likely to decline.’ This underscores a growing concern about the future job prospects for highly educated young individuals in an AI-driven economy.
