Government plans sweeping support for young people, including nearly 1 million won for jobs at regional small firms

South Korea’s government is preparing a broad package aimed at supporting young people from education and employment through housing, marriage and asset building. It plans to raise related spending by 53.5%, from 28.2 trillion won this year to 43.3 trillion won next year.

The biggest immediate incentives target jobs outside the capital region. The government will expand corporate subsidies under its Youth Employment Leap program to midsize companies in the capital area and large companies elsewhere. Payments for young people taking jobs at non-capital-region companies will also expand to include those working in the capital, with the maximum rising from 7.2 million won over two years to 18 million won.

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The polarization among young people is also quite severe.

A youth savings program will open to all young people, rather than only those earning 60 million won or less. A new preferential track for workers at regional small and midsize companies will raise the government matching rate from 12% to 25%. The government says a young person joining a regional small firm could receive benefits approaching 1 million won through the employment subsidy, savings match and cultural allowance. It based the plan on research showing a monthly gap of about 1 million won between actual wages and desired wages for such workers.

The package raises the income threshold for monthly rent support from 60% to 100% of median income. It proposes full scholarships at regional national universities, subsidies for a shared artificial-intelligence subscription for students, and an annual cultural pass worth 100,000 to 150,000 won for everyone aged 19 to 34. Newly married young people would receive a one-time 1 million won payment regardless of income. The government also estimates that a baby born next year could receive benefits worth up to 140.57 million won by age 18 and 195.82 million won by age 34. Economics professor Jeong Se-eun criticized the removal of income limits from the savings program, saying it could favor young people at large companies who already have greater capacity to save.

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If the income requirement for the youth savings program is removed, it could be much more advantageous for young people who have the capacity to save, such as those working at large companies, so it is not desirable.