By using the overlapping generation model, this paper shows that, in the
future, household agents would spend more time working during prime- and
old-age. Nevertheless, labor utilization rate of the economy is projected to
decline significantly, ultimately undermining the potentials of Korean economy
and exacerbating the gap between revenue and expenditure of the public
pension system in the future. The paper also reveals that it is advantageous,
in terms of sustaining the growth potential, to adjust the pension scheme by
combining an increase of the revenue and lowering of the pension benefit.