With 48.8 percent of older self-employed earning below minimum wage and 23.2 percent of the workforce self-employed, South Korea mirrors middle-income economies more than wealthier OECD peers
In South Korea, growing numbers of older workers find themselves squeezed out of the traditional job market and forced to turn to self-employment as a last resort. But far from offering a path to financial independence, new research reveals that nearly half of them are now earning less than the legal minimum wage — despite working full-time or more.
A government-backed study by the Korea Employment Information Service, released on March 18, paints a stark picture of the financial struggles facing older South Koreans in self-employment. As of 2022, 48.8 percent of self-employed people aged 50 and over earned less than the minimum wage, which was then set at 1,994,440 Korean won per month — about $1,360 based on current exchange rates.
The report is based on data from the Korea Welfare Panel Study, which tracks roughly 7,000 households over time. Researchers focused on individuals who were wage workers between 2006 and 2022 but were recorded as self-employed in the 2023 survey.
Nearly 59 percent of these new self-employed workers were aged 50 or older, indicating that the majority of this transition occurred among older adults — many of whom had spent decades in stable, salaried positions before retiring or being laid off.
What’s especially concerning, according to the study, is that self-employment not only offers limited financial stability but often represents a steep drop in income. For those in their 50s, 28.7 percent were earning below the minimum wage. But among workers aged 60 and over, that figure skyrocketed to 75.8 percent. In other words, three out of four older entrepreneurs in their 60s were making less than what’s legally considered a livable income in Korea.
‘Self-employed’ in name
These self-employed workers are not tech startup founders or high-growth business owners. In Korea, the term “self-employed” typically refers to small-scale operators running modest, labor-intensive businesses — think corner convenience stores, fried chicken joints, small restaurants, hair salons or street food stalls. These ventures are often opened with retirement payouts or severance money, not venture capital.
The barriers to entry for such businesses are low, though so are the returns. In fact, over half (53.8 percent) of newly self-employed older workers entered low-margin, consumer-facing service sectors like food, lodging and personal care. Many were former white-collar professionals — middle managers, office workers or public servants — who, after exiting the salaried workforce, found few viable options other than running franchised convenience stores or bakeries. This common trajectory has given rise to a wry Korean saying: “In Korea, it all ends with a fried chicken shop.”
Notably, the income outlook differed based on business structure. Among the self-employed aged 50 and over who employed others, only 10.9 percent earned less than minimum wage. But for one-person operations — solo entrepreneurs without employees — the share earning below the legal threshold rose to 56.3 percent.
Despite South Korea’s per capita income being now over $32,000, its self-employment rate remains unusually high. According to 2024 data from the International Labor Organization, 23.2 percent of South Korea’s workforce is self-employed, the sixth-biggest portion among the OECD member countries. This rate is more comparable to lower-income economies like Mexico (31.4 percent) and Chile (24.6 percent) than to developed nations such as Japan (9.5 percent) or France (12.9 percent). While entrepreneurship is often celebrated in global economic narratives, self-employment in Korea is less about innovation and more about survival.
The KEIS report made this point clear: for most older adults, the move into self-employment is not a career pivot but a forced response to dwindling employment options and inadequate retirement security.
“Many older entrepreneurs are launching businesses in sectors unrelated to their prior employment, often in fields with low barriers to entry and intense competition,” the study noted. “In most cases, self-employment is not a viable substitute for stable wage work.”
