IDB: Transformation: Skills for Productivity, in Chile
Financing Model for Training
in Korea
Jisun Chung (June 5, 2014)
Korea Research Institute for Vocational Education and Training
1
Educational System of Korea
Age School Year
24
22
VET Sector
MOE
MOEL (EI)
18
16
VT
VE
University
18
12
15
9
Junior College
High School
KUT
Polytechnics
VTIs
Vocational HS
Middle School
12
Compulsory
Education
6
Elementary School
2
Trajectory of Educational Expansion
 Step-by-step attainment of universal education:
primary → secondary → higher (tertiary) education
• Trow, “Forms and Phases of Higher Education”: Elite(<15%) →
Mass(15-50) → Universal(>70%)
Elite
Mass
Universal
90
70
50
30
10
-10
1970
1975
Primary
1980
1990
1995
Lower Secondary
2000
2003
Upper Secondary
2010
2012
Tertiary
3
Vocational Training and Ministry of Labor
Vocational Training Act (1967)
 Act on Special Measures for Vocational Training
(1976)
 Employment Insurance Act (1995)
 Vocational Training Promotion Act (1999)



Employment Insurance Scheme under the authority of
the Ministry of Employment and Labor (MOEL)
Three pillars: 1) Job Skills Development Program
2) Employment Stabilization Program
3) Unemployment Benefits
4
Number of Trainees who underwent Vocational Training during
2nd(1967~1971) to 7th(1992~1996) National Economic Development Plans
total
In-plant training
10
5
Number of Participants in Training
•
- 15 -
Changes in GDP per Capita since 1960s
26,204
26000
24000
($)
21,529
22000
20000
18000
16000
14000
11,471
12000
10000
8000
6000
4000
2000
0
105
‘60
‘65
‘70
‘75
‘80
‘85
‘90
‘95
‘00
‘05
‘10
‘11
‘13
‘14
 1965-1995: 100-times increase in GDP per capita only in 30 years. Drastic
development as shown in the graph
7
Classification of the Korean VTIs
Classification
No.
Total
2,777
Public
VTIs
Private
VTIs
Sub-Total
79
Public Org.
40
VTIs/Remarks
KOPO, KUT, KEPAD (Korea Employment
Promotion Agency for the Disabled)
Local Govern.
8
Seoul, Other Provinces
Min. of Justice
31
Inmates’ Vocational Competency
Sub-Total
2,698
Trg. Corporation
55
Non-profit Corporations
WRD Center
51
Women’s Vocational Competency
823
Individual Designated VTIs, KCCI
Women Resources Development
MOEL Designated
(Korea Chamber of Commerce and Industry)
Others
1,769
Companies or Associations, etc.
8
Polytechnics in Korea
• The KOPO, head quarter of Korea Polytechnics, was separated
from HRD Korea that established by MOL, in 1998.
• The KOPO is the biggest VT institution in Korea and trains
about 20,000 technicians a year and over 85% of graduates are
employed at enterprises.
College
Graduates
High School
Graduates
enter
Polytechnics
2years
2years
Craftsman
1 ~ 2years
Residents
1month ~ 1year
[Training
Courses]
graduate
Bachelor Deg
Associate Deg
No Degree
Engineer
Technician
Master
Craftsman
Craftsman
No Degree
9
Present Status of KOPO
• Short-term Training Courses : Up-grade, Residents, Inferior,
Women, etc
• Most of Training Dep’t concentrated on Technology Field.
10
Seoul-Jeongsu Campus
Korea Polytechnics
Textile-Fashion Campus
Korea Polytechnics
11
Response of 223 companies
Needs of industries for Education
87
75
Practice
Field training
creativity
72
Curriculum
meeting needs
70
Teaching
method
68
Experience
of staffs
12
Industry & Academia Cooperation
• Companies pay high cost for reeducation of new
employees
– 20 months, 55,000 US dollars per new employee
• To minimize this reeducation cost, companies
cooperate for college education
- development of curriculum and textbook together,
lecture, seminar, field training, internship
13
Polytechnic Colleges Policy
• Specialized Training Policies
• FL System
– Factory Based Learning : Same Training Circumstance as
Factory
– Training Curriculum based on Job/task Analysis
• Extension of Convergence Technology
– Technology combined with other Technology or Human
Studies
• Strong Relationship with Companies
– Various Affairs based on School-Industry Cooperation
– One Professor connected with Ten Companies
– Company centered Customized Training
14
Employment Insurance
as financial support mechanism for Training
☞ Employment Insurance (funding project) was
introduced in 1995 by the Ministry of Employment and
Labor as a social safety net.
• The EI is a comprehensive labor market policy and a
social security system including employment security
and vocational skills development programs
- aimed at preventing unemployment and promoting
employment as well as a traditional unemployment
insurance program providing unemployment benefits.
15
Levy-Grant System
• Every company is obligated to pay the imposed training fees o
f the employees, and the government pay back when the traini
ng implemented.
• Employer, employees and the unemployed are free to provide
or receive vocational training, and the EIS Fund grants subsidi
es for the training implemented.
• More favorable for large enterprises;
The return rates is flexible for the SMEs which are vulnerable
in terms of conditions to implement training.
16
Employment Insurance for all workers
 Support for skills development of the employers, employed,
job seeker, self-employed
 Coverage: All Workplaces
- Since October 1998, all workplaces with one or more
employee have been subject to the Employment Insurance
System.
 Companies implement training for the employees
autonomously, government induces and encourages the
companies to develop human resources needed by supporting
financially.
17
Annual Training Budget
18
Prerequisites for Success of EI
• National consensus on the necessity of EI
• Financial stability of EI fund is important for overcoming
unexpected high unemployment, and unemployment benefit
scheme should be designed to guarantee financial stability of EI
fund.
• Development of labor market infrastructure is essential for
success of EI
• Cooperation among related ministries
• EI is not a perfect safety net for the unemployed.
Complementary systems are necessary.
19
• Building a social consensus on optimal level of
contribution rates
- Employers ask to lower contribution
20
21