Future Challenges of Developmental Welfare State in Korea

1. Huck-ju Kwon, Grami Dong and Hyun-Gyung Moon Seoul National University The Future Challenges of the Developmental Welfare State: the case of Korea

2. Introduction • The current economic crisis is different from the previous economic crisis in 1997-8 • Can the existing welfare state in Korea to cope with the social contingencies that arise in a period of economic downturn?

3. Welfare Reform after the Asian Economic crisis of 1997-8 • Preoccupation with economic development • Leaving the vulnerable section of the population outside the system • Developmental welfare state could not cope with social challenges in economic downturn • Not able to tackle high unemployment

4. Welfare Reform after the Asian Economic crisis of 1997-8 • Social policy reforms that would enhance social protection for the vulnerable • MLSG, an extended EIP, a new social assistance programme and etc • It still has the features of a developmental welfare state • Toward becoming an inclusive developmental welfare state

5. Global Economic Recession and Social Policy Responses • The global economic downturn triggered by the subprime mortgage crisis in the US • The currency swiping deal with Japanese and the US • Special budgetary package, “Huimang” project

6. Global Economic Recession and Social Policy Responses • Differences between the two economic crises • Focusing on retaining existing jobs and creating new jobs in the labor market and temporary jobs through public works • A range of social policy instruments, such as MLSG and EIP, were already in place to provide social protection

7. Figure3. Minimum Living Standard Guarantee Claims During the Economic Crisis Source: Im 2009.

8. Table 4. Percentage of Unemployed People Receiving Unemployment Benefits in Korea Source: Korea Employment Information Service, Employment Issuers(http://www.keis.or.kr)

9. Global Economic Recession and Social Policy Responses • In a nutshell, the existing social policies of the welfare state responded well to the global economic crisis • Does this mean that the welfare state in Korea will cope well with social risk in the future?

10. Global Economic Recession and Social Policy Responses • Future challenges • Demographic ageing and low fertility • A stagnated female participation in labor market resulting from the lack of care facilities for children • The welfare state in Korea should be strengthened to provide adequate support for the family, otherwise the long-term growth potential of the economy will be seriously undermined

11. Concluding Remarks • Increasing the number of the care facilities for children and the elderly and enhancing the economic and geographic accessibility • Necessary to address the gender inequality in the labour market • Reconsidering the balance between work and life