Huck-ju Kwon, Grami Dong and Hyun-Gyung Moon
Seoul National University
The Future Challenges of the
Developmental Welfare State: the
case of Korea
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?
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
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
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
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
Figure3. Minimum Living Standard Guarantee Claims
During the Economic Crisis
Source: Im 2009.
Table 4. Percentage of Unemployed People Receiving
Unemployment Benefits in Korea
1997
1998
1999
2007
2008
2009
7.8
26.3
33.1
35.3
38.5
41.8
Source: Korea Employment Information Service, Employment Issuers(http://www.keis.or.kr)
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?
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
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
