Unemployment among young people in South Korea is worse than the level reached during the global financial crisis, a state-run think tank said Tuesday, calling for urgent measures to tackle the problem.

The Korea Institute for Industrial Economics and Trade said in a report that overall conditions for young people just entering the job market are worse than in 2009, when the country, and the world at large, was still struggling with the 2008 global crisis.

Government statistics have consistently showed unemployment among young people being two to three times higher than the national average.

"In the past several years there has been a steady improvement in the country's job market with more regular employees being hired, but such positive changes have not affected young people," KIET said. "There has been deterioration in the quantity and quality of work open to young people."

According to the report, the employment rate for people in their 20s stood at 57.4 percent in 2014, down from 58.2 percent in 2009.

"The decline stems from fewer job opportunities for college and university graduates, and rise in part-time positions and internships," the institute said.

The report also showed conditions facing young people in the launch of new businesses were also bleak.

The number of self-employed among those in their 20s, which is a good barometer of people launching new businesses, fell to 170,000 in 2014, down from 200,000 in 2009.

KIET said difficulties facing young people largely stems from the "dual labor market," structure found in the country where there is a wide gap between full-time regular employees with stable jobs and good pay, and non-regular workers who have far less job security and get paid less.

"This division is naturally causing young people to seek positions in large conglomerates and public sector jobs, and that is resulting in excessive competition and fueling unemployment, while companies that are less appealing are hard pressed to find workers," it said.

This imbalance causes people to enter the job market late or opt for internships and part-time positions and is creating problems for quality of work, and can even lead to young people not being able to find work.

The think tank said to overcome such challenges there is a need by all sides to ease the dual labor market structure. It said large companies and small and medium enterprises need to work more closely to tackle such issues.

An expected economic slowdown is feared to result in less demand for workers, so the country and the business community needs to find new growth engines that can create more high paying jobs, it said.

"The government should increase incentives to companies that hire more people, while at the same time taking steps to remove administrative red tape that is holding up investment and hiring," KIET said. (Yonhap)