Politics of social policy in korea
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Politics of social policy in Korea. Why is inequality becoming a bigger concern? What effects did the democratization and the financial crisis have on social policy in Korea? Is welfare politics becoming salient? What’s the prospects of welfare politics?

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Politics of social policy in Korea

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Politics of social policy in korea

Politics of social policy in Korea

  • Why is inequality becoming a bigger concern?

  • What effects did the democratization and the financial crisis have on social policy in Korea?

  • Is welfare politics becoming salient? What’s the prospects of welfare politics?

  • Will Korea develop toward a social democratic, conservative, or liberal welfare state?


Varieties of welfare capitalism

Varieties of welfare capitalism

David Soskice: liberal vs. coordinated market economies

Gøsta Esping-Andersen: liberal, social democratic, conservative welfare states

  • LMEs: the USA, Britain, Australia, Canada, New Zealand, Ireland

  • CMEs: Germany, Switzerland, the Netherlands, Belgium, Austria; Sweden, Norway, Denmark, Finland; Japan


Labor market institutions and welfare states early 2000s

Labor market institutions and welfare states, early 2000s


Redistributive impact of welfare states

Redistributive impact of welfare states

  • Inequality and redistribution among working-age households, late 1990s

    Mkt Gini Disposable Redistribution

    Nordic SMEs 35.2 23.632.9%

    Continental SMEs 34.8 25.6 25.7%

    LMEs 41.8 32.4 22.6%

    (US) (43.6) (36.3) (16.7%)


Universal vs selective programs

Universal vs. Selective Programs

  • Universal programs: “How shall we solve our common problem (health care, education, pensions, etc.)?”

  • Selective programs: “How shall we solve their problem?” -Stigmatization (“the undeserving poor”)

    Means-testing (whether and how much to support): suspicion and arbitrariness, cheating and corruption, costly administration  undermines public support

    Means-tested (targeted) assistance is not more redistributive. Why?


Redistributive effect of the universal welfare state

Redistributive effect of the universal welfare state


Korea historical breakdown

Korea: Historical Breakdown

  • Pre Democratic Period

    • Welfare Developmentalism

  • Post Democratic Period

    • Expanding the social contract

  • Post Financial Crisis Period

    • End of Welfare Developmentalism?

  • New Welfare Politics

    - Universal or selective welfare programs?


Pre 1987

Pre-1987

  • Welfare Developmentalism

    • Primacy of Economic growth

    • Key sectors first to receive limited social insurance:

      *Public pension system: Government employees(1960), military personnel(1963), private school teachers(1975)

    • Limited gov’t fiscal commitment: “regulator”

    • Expanding investments in education

  • Low inequality

    - Not because of social policy

    - Land reform, Korean War

    - Labor-intensive industrialization with full employment


Post 1987

Post-1987

  • Coverage for all citizens: Health insurance

  • Direct gov’t fiscal commitments

    • Health care contributions to farmers, self-employed (1990)

  • National Pension Scheme: private sector employees in companies with 10 or more employees (1988), companies with 5 or more employees (1992), farmers and fishermen (1995)

  • Modest Unemployment Insurance (1992)


The impact of the 1997 financial crisis

The Impact of the 1997 Financial Crisis

  • Rising unemployment

  • Declining full-time, regular employment

  • Growing inequality

  • Also, rapid population aging


Poverty rate and widening gap in income in korea

Poverty Rate and Widening gap in income in Korea


Post financial crisis rapid expansion but still small welfare state

Post-financial crisis: Rapid expansion, but still small welfare state

  • Fiscal strains but no rolling back

    • National health care program in the red

    • Pension system faces long-term insolubility:

      *Partial privatization not adopted

  • “social right to decent living for every citizen”:

    - Minimum Living Standard Guarantee Act (2000)

  • Greater long-term fiscal commitments


Growth of welfare expenditure in the total government spending

Growth of welfare expenditure in the total government spending


Social expenditure selected oecd countries of gdp source adema and ladaique 2005 p 72

Social Expenditure, selected OECD countries(% of GDP) Source: Adema and Ladaique (2005), p.72


The basic goal of the vision 2030

The Basic Goal of the “Vision 2030”

10 thousand dollars/capita

Norway

2030

Swiss

USA

Denmark

England

Sweden

  • 2020

Japan

Germany

  • OECD Average

Greece

Korea

Mexico

Poland

  • Public social expenditure/GDP


Politics of social policy in korea

Source: OECD ECONOMIC SURVEY OF KOREA (2008)


The size of the blind spot of social insurance system

The Size of “the Blind Spot”* of Social Insurance System


Why small welfare state in kor

Why small welfare state in KOR?

Kim, Young-soon:

  • Institutions of interest representation:

  • Social dialogue


Why small welfare state in kor1

Why small welfare state in KOR?

Kim, Young-soon: Institutions of interest representation:

  • Political party w/o policy:

    Policy making by the bureaucracy, with civil society input

  • Why?

    Single-term presidency, regionalism, lack of class cleavage, anti-communism & narrow ideological spectrum, ideological politics developed surrounding North Korea policy

  • Social dialogue

    -Tripartite Agreement (2/6/98)

    -KCTU’s withdrawal & company unionism: Low coordination & centralization


Yang jae jin 2004 democratic governance bureaucratic politics

Yang, Jae-jin (2004), Democratic governance & bureaucratic politics

  • Dominance of economic bureaucrats→ social bureaucrats

  • Increasing role of civil society organizations

  • Formation of pro-welfare policy network

  • Still, bureaucratic politics over party politics


New era of welfare politics

New era of welfare politics?

  • 2010 local elections: Free school lunch as a defining issue

  • DP’s new platform: Universal welfare state, debate on wealth tax

  • GNP’s response: Selective vs. near-universal welfare programs, debate on tax cuts

    Why?

  • Increasing economic polarization

  • Role of DLP & progressive educational superintendents

  • Prospects?

  • Institutionalization of party system?


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