Rising output per hour masks dual-sector stagnation, shrinking labor pools and new regulatory risks for investors

South Korea’s recent statistical eclipse of Japan in labor productivity is a misleading indicator that obscures deep structural imbalances and a demographic collapse more severe than that of its neighbor.

While data from the Penn World Table suggests South Korea generated $54 per hour worked in 2021 international dollars compared to $49 in Japan, this milestone represents a lagging byproduct of capital intensity rather than a broad increase in national efficiency.

South Korea’s recent statistical eclipse of Japan in labor productivity is a misleading indicator that obscures deep structural imbalances and a demographic collapse more severe than that of its neighbor.

While data from the Penn World Table suggests South Korea generated $54 per hour worked in 2021 international dollars compared to $49 in Japan, this milestone represents a lagging byproduct of capital intensity rather than a broad increase in national efficiency.

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