Due to the rapid aging of the population and a low birth rate causing changes in the demographic structure, the Korean society is facing serious challenges. This study aims to explore what kind of challenges the demographic change poses in terms of human resources management in Korean companies, and what countermeasures should be sought.

The fundamental cause of demographic change is first identified as rapid aging and low fertility, and the challenge is approached from four perspectives. First, the demographic change can place various burdens on the seniority-based HR management system, and the challenges are identified. Second, drawing implications from the existing studies, the study addresses the concern that demographic change can lead to a decrease in corporate labor productivity. Third, we explore factors of anxiety regarding the aging of employees due to changes in the demographic structure, and we seek alternatives in terms of personnel management. Fourth, we investigate the fundamental cause and solution of changes in the demographic structure in the utilization of female workers and discover countermeasures.

This study can provide guidelines on how Korean companies should respond to demographic changes and what efforts should be made. In addition, it is possible to estimate what kind of policy support is needed for these companies’ efforts.

· Principal Investigator :Jeong-Yeon (Jay) Lee(Business School, Seoul National University)

· Co-Investigator :  Byung-Im Kim(PhD Candidate, Business School, Seoul National University)

Recent changes in population structure have shown the increase in both the number of single parent families and that of the aged. It is a duty owed by the government as well as this society to take care of them. This research is concerned with the latter issue. It especially deals with the role of and the use of the trust, for it could be a useful and practical instrument to protect their interests and to improve their living conditions. But trusts require funding to achieve their purposes. Trust funds could be financed through the issue of trust bonds. But the relevant criteria and standards as to how to administer and run those funds must be well planed. We also need to explore the qualifications of trustees and the relevant regulations. Most of all, it is particularly crucial to create a system that could accommodate the special nature and characteristics of single parent families and the aged. It is thus necessary to design a trust model suitable for the trusts for them. It is to these issues that this research is devoted.

· Principal Investigator :Sunseop Jung(School of Law, Seoul National University)

· Co-Investigator :  Ying-Chieh Wu, Kye Joung Lee(School of Law, Seoul National University)

· Principal Investigator : Hyeok Jeong(Graduate School of International Studies, Seoul National University)

· Co-Investigator :  Changhui Kang(School of Economics, Chung-Ang University)

This study analyzes how a demographic transition due to low birth rates and fast population aging affects the determination of the real interest rate and aims at making a long-run forecast of the real interest rate based on a predicted demographic change in South Korea. Specifically, 1) we plan to develop an economic model that can explain the mechanisms through which a demographic change can influence the determination of the real interest rate and properly parameterize it based on the South Korean data; 2) we will investigate how the demographic change that South Korea experienced since 1990’s contributed to a prolonged decline in the real interest rate in South Korea; and 3) we plan to make a long-run forecast of the real interest rate based on scenarios on the trend in the birth rate and population aging. This study will form a basis for future research about a desirable level of the inflation target and the monetary policy rate.

· Principal Investigator : Woong Yong Park(Department of Economics, Seoul National University)

· Co-Investigator :  Jae Won LeeSun-Bin Kim(Department of Economics, Seoul National University)

This work studies impacts of the 4th industrial revolution on financial markets. New technologies remarkably change the financial industry and influence the states of individuals and companies. The first topic is about portfolio construction and risk management. New technologies give rise to changes of market participants’ risk preferences, which determine optimal portfolios and risk controls in the long run. The second topic is to solve finance problems via artificial intelligence algorithms. We develop neural network algorithms for pricing assets and optimal solutions by using probabilistic methods and partial differential equation theories. Finally, this study deals with information asymmetry in financial markets and the corresponding equilibrium prices caused by the 4th industrial revolution. Through these studies, we illuminate the relation between the 4th industrial revolution and financial markets.

· Principal Investigator: Hyungbin Park(Department of Mathematical Sciences, Seoul National University)

In the last 15 years or so, world economies crucially depended on stimulus from major central banks. While central banks traditionally used open market operations to achieve monetary policy objectives and discount-window lending against very safe collateral to support financial stability, after the crisis of 2007-2009, and of course with the pandemic recently, they had to reinvent themselves. In particular, they started to act as a market maker of last resort (MMLR) to address liquidity problems in specific markets and ensure the flow of credit to specific sectors and firms that are critical to the real economy. While the literature has typically focused on the lender of last resort role of central banks in the traditional bank-based system, the modern financial system is more market-based with the substantial growth of non-bank intermediaries, where dealers’ provision of market liquidity in the presence of fire-sales is of central importance for financial stability. This study provides a theoretical framework to analyze the market maker of last resort role of central banks.

· Principal Investigator: Dong Beom Choi(Business School, Seoul National University)

Despite the extensive study globally of interest, bonds, and stochastic volatility models, few resources cover these topics with sufficient mathematical depth in Korean. These three technical research reports cover the theory and application of interest models, bonds, and term structures in Korean. Additionally, we intend to publish a book on Fourier analysis to cover the necessary prerequisite mathematics needed to understand these financial topics.

· Principal Investigator: ByoungSeon Choi(Graduate School of Data Science and School of Economics, Seoul National University)

1. “Trends in the Number of International Students in Korea and the Implication: Focusing on the International Education Quality Assurance System (IEQAS)”

In this project, using the administrative data set of universities in Korea, the team conducted dynamic difference in difference analysis to confirm the impact of changes in the inflow of foreign students on the finance and education of the universities after IEQAS was introduced. As a result of the analysis, first, the implementation of the IEQAS lowered the proportion of international students in the universities highly relying on foreign students, and had a relatively strong effect on the university group in the non-Seoul-capital-area. Second, we confirmed that, although the overall quality level of foreign students improved (e.g., the improvement of international students’ language ability), the university group with high ratios of international students did not experience a stronger effect compared to the university group with low ratios. Third, the introduction of the IEQAS had a negative impact on the finances of some universities by increasing the ratio of long-term liabilities to the equity capital.

2.“Koreans’ perceptions on Korean Chinese and North Korean refugees and their Policy Preference for Immigration Policy”

In this project, the research team conducted a large-scale survey in 2019 to investigate Korean natives’ perceptions of Korean Chinese and North Korean refugees to provide empirical evidence that can help develop public policy aiming at reducing social conflicts. The survey data collected indicate that the ratio of the respondents who have interacted with Korean Chinese (respectively North Korean refugees) were about 20% (resp. about 9%), which was significantly lower than that of all foreign immigrants. In addition, the research team observed negative misperceptions (for example, the respondents overestimated the population size of Korean Chinese and North Korean refugees). These negative misperceptions were large compared to those on the overall immigrants.

· Principal Investigator : Syngjoo Choi (Department of Economics, Seoul National University)

· Co-Investigator : Chung-Yoon Choi(MA Candidate, Seoul National University), Seonghoon Kim (Singapore Management University), Jongkwan Lee(Department of Economics, Ewha Womans University)

South Korea’s total fertility rate has been below 1.3 children per woman for twenty years, the longest duration of “lowest-low” fertility among developed countries. Using the Census, Vital Statistics, and the Economically Active Population Survey, this paper studies changes in fertility patterns at both the intensive and extensive margins, focusing on women born between 1960 and 1980. We also conduct analysis by women’s educational attainment and work status to better understand the work-family trade-off experienced by women in each cohort and discuss policy implications.  

· Principal Investigator: Jisoo Hwang (College of Liberal Studies, Seoul National University)

Due to the continuous low birth rate and increased longevity, the total working population in Korea is expected to decrease from 2030. Therefore, the policy response is needed because it greatly reduces the size of the economy in the long run. This study quantitatively analyzes the mitigating effect of an immigration policy for the foreign labor force in response to population aging using the overlapping generations model of heterogeneous agents. Since the impact on the aggregate economy may vary depending on the skill level of foreign labor, the model analyzes age and skilled and unskilled workers. The policy implication of this study is expected to be used to design an immigration policy for the foreign labor force in the future.

· Principal Investigator : Jay H. Hong (Department of Economics, Seoul National University)

· Co-Investigator :  Sun-Bin Kim (School of Economics, Yonsei University) 

This study aims to provide empirical evidence for the following two topics for evaluating and improving policies in response to low fertility. First, we attempt to evaluate the effectiveness of the government expenditure on low-fertility programs by reclassifying it into sub-categories and by matching them with causes of low fertility. We also examine the size and features of public spending by the central and local governments, and identify problems related to the budget for low fertility programs. Second, we attempt to investigate the effects of the major policies for promoting child birth, including cash benefits and supports for childcare supports, by constructing new data and by analyzing heterogeneity across populations with different socioeconomic status.

· Principal Investigator : Chulhee Lee(Department of Economics, Seoul National University)

· Co-Investigator : Sok Chul Hong (Department of Economics, Seoul National University)