South Korea’s growing reliance on foreign workers is creating a larger role for overseas labor in the country’s employment-insurance system, a shift with implications for U.S. companies operating in Korea and investors watching its labor-market costs. Unemployment benefits paid to foreign workers reached a record level in 2025 even as the number of foreign workers covered by employment insurance more than doubled, underscoring the rapid expansion of the formal foreign workforce.
The figures, released September 21 from data provided by South Korea’s Ministry of Employment and Labor, show that unemployment benefits paid to foreign workers reached $81 million in 2025, up from about $71 million the previous year.
The number of foreign workers enrolled in employment insurance increased to about 458,600 in 2025 from roughly 177,200 in 2021, a 2.6-fold increase. The number of foreign workers receiving unemployment benefits rose more modestly, from about 15,400 to 16,700 over the same period.
China-linked workers accounted for the overwhelming majority of benefit payments. Ethnic Koreans from China and Chinese nationals received a combined $63.8 million, or about 79% of all unemployment benefits paid to foreign workers last year.
Their share of the insured foreign workforce was considerably smaller. At the end of 2025, ethnic Koreans from China and Chinese nationals accounted for about 118,800 workers, or 25.9% of all foreign workers enrolled in employment insurance.
The concentration of benefits among Chinese nationals and ethnic Koreans from China may partly reflect their longer-term participation in South Korea’s labor market. Many ethnic Koreans from China hold the F-4 overseas Korean visa, which allows longer stays and provides greater flexibility in employment and job changes than the E-9 visa used under South Korea’s nonprofessional foreign-worker program.
Vietnamese workers ranked next in the number of unemployment-benefit recipients, followed by U.S., Japanese, Taiwanese and Filipino workers.
The expansion of benefit payments has occurred alongside a much larger increase in insurance contributions. Employment-insurance premiums assessed on foreign regular workers for unemployment benefits and employment-stability programs rose to about $126 million in 2025 from roughly $67 million in 2021.
The numbers highlight a broader shift in South Korea’s labor market. As the country faces demographic pressures and labor shortages in industries that depend on foreign workers, more overseas employees are moving into the formal employment-insurance system.
For U.S. companies with operations or supply chains in South Korea, the trend could affect labor costs, workforce planning and the structure of employee benefits. For investors, the expanding pool of insured foreign workers offers another indicator of how deeply foreign labor has become integrated into South Korea’s economy.
The record unemployment-benefit payments do not by themselves indicate that foreign workers are placing a net financial burden on the employment-insurance system. The same data show a substantial increase in premiums paid by foreign workers as their participation in the formal labor market has expanded.
Instead, the figures point to a rapidly growing segment of South Korea’s workforce—and an employment-insurance system increasingly shaped by the country’s reliance on foreign labor.
