Korea's Age-Skill Profile from PIAAC: Features and Puzzles

This paper estimates Korea’s age-skill profiles in comparison with other OECD countries such as Japan, Germany, USA, UK and Finland, using the PIAAC data, the recent skill competence survey of adult workers from OECD countries. According to this survey, Korean worker’s skill level is slightly lower than the OECD average among the workers older than mid-30s. This is puzzling considering the stellar performance of Korean young students in another international academic competence test such as PISA. We attempt to feature the age effects on skill formation among OECD countries during the work life-cycle sorting out cohort effects by using the PISA data for the youth or by using the educational achievement and environment data as well as the on-the-job learning variables for the adult workers. We find that the skill levels of Korean workers decline much faster with aging compare to other comparison countries. Such fall happens particularly during the earlier stage of work life, which is not observed in other countries. We argue that such age effects on skill formation for Korea are likely to be related with Korea’s education system and on-the-job learning environments and incentives at work place.