Korea’s labor market will face an oversupply of nearly 500,000 college graduates by 2020, as a mismatch between jobseekers and the demand for their skills widens a government report said Tuesday.

The Ministry of Employment and Labor projected in the report that some 4.6 million holders of two-year college degrees or higher will enter the labor force over the next decade.

The national economy is likely to add just 4.1 million jobs for them, resulting in an oversupply of 500,000 workers, it said.

As for non-college graduates, however, the country will experience a shortage of about 320,000 workers, as 671,000 will vie for 990,700 jobs available.

These were the highlights of the ministry’s mid- to long-term labor force policy plan for 2011-2020 reported to President Lee Myung-bak.

“This means that the oversupply of college graduates is going to continue for another 10 years, while jobs for non-college graduates will go untaken,” a ministry official explained.

“This is why we need to continue efforts to restructure the tertiary education system and other measures to address the labor market mismatch,” he added.

Korea’s economically active population aged 15 to 64 is expected to increase to 27.14 million in 2020 from 24.56 million at present, accounting for 62.1 percent of the total population. The unemployment rate is projected at 3.6 percent, similar to the current levels.

Reflecting the demographic changes and aging of society, workers aged 30 to 54, considered the core labor force, will shrink by 37,000 while senior workers will grow by 298,000.

The female labor force participation rate will rise by 1.6 percentage point to 50.8 percent from 49.2 percent in 2010, while the figure for male workers will edge up to 73.8 percent from 73 percent.

By Lee Sun-young (milaya@heraldcorp.com)