Policy Monographs
A Comparative Study of Advanced Welfare States for a Sustainable Welfare System in Korea
- Author
Kim Yong-ha, et al.
- Publication Date
2011
- Pages
- Series No.
- Language
A Comparative Study of Advanced Welfare States for a Sustainable Welfare System in Korea
In this post-industrial society characterized by low-growth, low-fertility, and population aging, ‘sustainability’ has become a core concept in the discussion of the future of the welfare state. Gloomy predictions as shown in the mentioning of the crisis or scaling down of the welfare state have attracted much attention from the academics, politicians and civil societies. Much of the debate of sustainability has been focused on ‘fiscal sustainability’ reflecting the impact of the Western Europe’s fiscal crisis that is currently undergoing. In Korea, where debates on welfare are in full gear, the focus on fiscal sustainability is also dominant as is shown in the debate on universal vs. selective welfare.
Korea is categorized as a low-welfare, low-burdened, and fiscally sound country with its social welfare spending out of the GDP half the average spending of the OECD countries. As the pressures of rapid population aging and the changing family structure on welfare demands are increasing and it is difficult to ascertain enough funds for welfare spending due to the structural problem in the low-growth post industrial society, Korea is nowhere close to a safe haven. However, as compared with other OECD countries when their economies were at the level of per capita income of $20,000, Korea’s social welfare spending should be at the level of 13.84% of GDP even when considering the proportion of its population aged 65 or older, but it is now spending 9% of GDP on social welfare, meaning it has room for increasing the expenditures.
The dynamics of the welfare state is the result of socio-economic, political, and other factors working together. This means that if our discussions on the sustainability of the welfare state are focused only on fiscal sustainability, its solutions will be limited. Thus, we should review not only fiscal aspect, but also general social structure including social, economic, political facets in finding optimal solutions for the sustainability of the welfare state. For example, the level of public welfare spending is associated with population structure such as the percentage of elderly population, and low-fertility with the availability of quality jobs and social conditions for women’s economic activities and child care. Also, stable job availability will not only be a source of fund for welfare, but it will decrease welfare demands. Meanwhile, policies regarding low-fertility and job creation require political decision-making in terms of resource allocation. Different understandings and positions on redistribution policies also require political decision-making.
This study aims at developing a sustainable welfare system for Korea by looking into the history of advanced welfare states and the debates on Korean welfare models. We have divided the concept of sustainability into multiple sub-categories and conducted an analysis on Korea’s current positions on the development levels of each category. This study is particularly important in that researchers have visited some selected countries conducting interviews with local experts and scholars in the fiscal and welfare fields on the current trends of welfare policies and each nation’s strategic responses. The interview results were also made public through the media. The study suggests the directions of Korea’s welfare system for its sustainable future based on the analysis it carried on the current problems Korea’s welfare system is facing.