Gov't to create 200,000+ youth jobs, prioritize public rental housing for young people in H2 economic plan

The government plans to tackle polarization during the AI transition by driving inclusive growth for youth, small and medium-sized enterprises and small business owners in the second half of this year, while launching structural reforms across finance, the public sector, fiscal policy and taxation. To that end, it will create more than 200,000 jobs for young people and give them priority access to a new type of public rental housing. Coverage of unpaid wage advances at bankrupt workplaces will be extended from three months to six, loan regulations on speculative non-resident single-home owners will be tightened, and the priority kindergarten admission threshold for multi-child families will be lowered from three children to two.

Deputy Prime Minister Koo Yun-cheol, who also serves as minister of economy and finance, presented the "2026 Second-Half Economic Growth Strategy" at a Cabinet meeting Tuesday, outlining measures to address structural inequality and drive reform.

As a first step, the government has drawn up a basic plan for employment security during industrial transition, aimed at getting ahead of AI's impact on jobs.

The plan targets the creation of more than 200,000 positions in total — 100,000 private-sector jobs in emerging industries, science and technology, culture and finance, including expanded work-experience programs linked to hiring, and 100,000 public-sector jobs tied to public value creation and strengthening the competitiveness of key national industries.

To help young people build assets, the government is working toward a first-half 2027 launch of a youth-specific individual savings account (ISA) for those earning up to 75 million won ($49,800) annually. The product will offer a 10 percent income deduction on contributions and significantly expanded tax exemptions on interest and dividend income, along with higher contribution limits.

On housing, the government will give youth priority access to a new type of public rental housing in transit-oriented areas with appropriately sized units, and will also move quickly to supply purchase-based rental units and jeonse rental units in urban centers.

To usher in a new era of entrepreneurship, the government will nurture 15,000 innovative startup founders through a public startup audition program called "Everyone's Startup Project," with plans to expand the initiative in 2027.

The government will also broaden the "Jump-Up Program," which provides tailored, stage-by-stage support to help high-potential companies grow into mid-sized enterprises.

Measures will be introduced to strengthen the effectiveness of the levy system for employing people with disabilities, and the coverage period for unpaid wage advances at bankrupt workplaces will be extended from three months to six. A fourth comprehensive basic livelihood security plan — including a phased increase in the eligibility threshold for livelihood benefits and improvements to the family support obligation criteria for livelihood and medical benefits — is set to be established in October.

The government will also pursue a broad transformation of the financial sector, focusing on improving the health of capital markets and severing the link between real estate and finance.

To strengthen financial support for venture companies and other high-growth firms at each stage of development, the government will raise the ceiling for small-scale public offerings from 1 billion won to 3 billion won and add new sectors eligible for Kosdaq's technology-based special listing track to help innovative companies go public more smoothly.

To prevent money from flowing into real estate, the government will tighten loan regulations on speculative non-resident single-home owners and gradually expand the scope of the debt service ratio (DSR) requirement, aiming to curb speculative borrowing demand and close regulatory blind spots.

Jeonse loan guarantees will be gradually scaled back by progressively lowering guarantee ratios for all borrowers except homeless youth and vulnerable groups.

The government will also strengthen strategic management of national wealth.

The treasury fund allocation system will shift from a ministry-wide lump-sum approach to a project-by-project method focused on priority programs, and all fiscal programs will be reviewed from scratch during the 2027 budget drafting process as part of what the government described as the most sweeping expenditure restructuring in the country's history.

To address population decline and ease the burden of child-rearing, the government will continue phasing up child allowances and, through consultations with provincial and metropolitan councils, will lower the priority kindergarten admission threshold for multi-child families from three children to two — standardizing a criterion that currently varies by region.

The retirement pension system will be comprehensively overhauled within the year, including mandatory adoption of retirement pensions at all workplaces, activation of fund-type retirement pensions, and improvements to the management framework, to strengthen the multi-layered old-age income security system.

To reduce safety blind spots, relevant ministries will jointly conduct a large-scale survey of more than 190,000 factories and warehouses nationwide, and expand support for disaster prevention programs tailored to on-site workers, covering heat and cold wave preparedness and health management.