KDI: North Korea is among poorest

North Korea has a high employment rate with an annual per capita income of $2,715 based on its own 2008 census. But in reality, the employment rate and even its income per capita is in a dire state, according to a recent study.

According to a report by the Korea Development Institute released Thursday, North Korea’s employment rate is as low as 31 percent and as high as 62 percent. KDI also projected North Korea’s income per capita to be between $948 and $1,361 per year.

The report noted that North Korea’s official employment rate is relatively higher because it includes those who serve in the military and are enrolled in higher education, a period that could last 10 years.

“North Korean men usually start their military service or higher education at the age of around 19. However, the employed share [rate] of this population marks 52 percent of the total,” Lee Suk, the KDI researcher, said in the report. “And of those who have just started to work after the mandated 10-year military service or university education, the share of those ages 20-29 rose to 86 percent, while that for those younger peaked at 97 or 98 percent.”

Lee said the North Korean female employment rate is similar.

The male employment rate under the official data by North Korea exceeded 95 percent while for women it neared 80 percent. This figure is higher when compared to South Korea’s 61.1 percent employment rate in November and the 66.8 percent average employment rate of OECD member countries in the first quarter.

The KDI report hinted that those considered employed could actually be jobless.

“The majority of the companies and workplaces in North Korea are already at a standstill, following the economic crisis in the 1990s, and the workers are ‘employed’ on paper only, according to outside observers,” Lee said in the report.

The report based its study using the “household economic activity” criteria in the 2008 census. This category studies self-consumption of households, which refers to food supplied.

Since food is rationed through the workplace, the researcher used the rations to estimate employment.

The KDI report also estimated the actual income of North Koreans, using energy consumption, although half of the population could be unemployed.

The census showed that nearly half of North Koreans relied on firewood as a primary energy source, while coal accounted for as much as 93 percent.

“These figures are an indicator of North Korea’s poor consumption and also serve as good evidential data in estimating real income,” Lee said.

Lee said the actual GDP implies that North Korea was one of the poorest economies in 2008. However, Pyeongyang’s residents have a better income, between $2,658 and $2,715.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]