This paper studies work flow dynamics in Korea from 2000 to 2011 by using data from Economically Active Population Survey (EAPS). We examine the size and cyclicality of both the gross work flows and the associated transition rates between the labor market states of employment, unemployment, and inactivity. We find that about 5% of the working age population changes labor market status in each month.
Inflows and outflows of unemployment are counter-cyclical, while flows between employment and inactivity are procyclical. We also decompose unemployment fluctuations into the parts due to changes in inflow and outflow rates. Conventional decomposition method finds that both inflow and outflow rates contribute substantially to unemployment fluctuations in Korea and particularly inflow through inactivity plays a relatively larger role in unemployment dynamics in Korea, compared to other countries.