"It's time to make a determination for our sons and daughters, as well as for the future of the country," Park said as she addressed the nation in a nationally televised speech.

Park pushed for the overhaul of issues that have shown few signs of progress, such as labor market duality -- the difference in pay and job security between regular and non-regular workers.

Some companies shun recruitment and instead rely on non-regular workers that they can fire more easily as the economy remains sluggish, a development that has pushed up the jobless rate for young people.

The unemployment rate for young people between the ages of 15 and 29 stood at 10.2 percent in June, compared with the overall jobless rate of 3.9 percent in the same period, according to government data.

She also vowed to ensure that all public companies will introduce a wage peak system within this year, which she said could create about 8,000 jobs for young people in two years.

The system is designed, among other things, to provide job security for older employees through a gradual wage cut after a certain age. The money saved can be used to hire more young people.

"We can maintain employment and create more jobs only when we embrace a fair and flexible labor market," which is decided by merit, she said.

In South Korea, promotion has long been based on seniority, not on merit, in some companies, though merit has become a key factor in recent years.

The rare address underscored her commitment to pushing for reform in key sectors as her single-five year term is almost halfway through.

Park called on a tripartite committee of the government, businesses and labor organizations to quickly resume dialogue and make concessions to produce a deal meant to reform South Korea's rigid labor market.

The dialogue has been stalled since April, when an umbrella labor union walked out of its negotiations with the government and management on labor market reforms.

Welcoming Park's pledge for labor reform, the business community vowed to actively cooperate with the government on the issue.

"We confirmed the president's commitment to labor reform as she underlined the matter most out of four reform initiatives that she is pursuing," the Federation of Korean Industries said in a statement.

"We, in particular, welcome such reform efforts as introducing wage peak and performance-based pay systems and improving the flexibility of the labor market," the country's largest business lobby added.

She also vowed to make a series of efforts to save taxpayers money and overhaul public companies, which have long been associated with lax management and low productivity.

Touching on education, she said the government will expand a test-free semester program for students next year to ensure that students can explore their full potential.

South Korea introduced the pilot program in 2013 to provide middle school students with chances to experience a wide range of learning activities for their future careers.

Under the program, schools will shift the focus away from test scores and teach students through such diverse engaging methods as discussion, experiments, outdoor activities and team projects.

The one-semester program represents a big change in a country where students tend to rely on rote learning that might result in lack of creativity and critical thinking.

She also called for reform in the finance sector, warning that South Korea will be left behind unless it keeps up with the fast-changing mobile-led market trends amid a recent wave of fintech, a combination of finance and technology.

"Let us share each other's burden," Park said, noting that the government and the president alone cannot bring changes.

Meanwhile, the main opposition New Politics Alliance for Democracy criticized Park for offering no apology over the government's poor initial response to the outbreak of a deadly respiratory disease and the spy agency's alleged hacking.

Last week, South Korea declared a de facto end to the outbreak of Middle East Respiratory Syndrome, which has killed 36 South Koreans. South Korea reported no additional MERS cases for the 32nd consecutive day on Thursday.

The opposition party suspects the National Intelligence Service could have carried out surveillance of ordinary South Koreans, a charge denied by the spy agency. (Yonhap)