A review of Active Labor Market Policy in Korea: Employment Insurance and National Basic Livelihood Security System

Korea has been experiencing the problems of employmentand poverty against the backdrop of globalization. The 1990s wasa turning point for Korea in terms of economic and welfare policies.Since the 1990s the GDP growth rate of Korea has been decreasing, and the global economic crisis pulled downthe growth rate to a negative one.Korea searched for a new way of adjustment in both economic and welfare policies, and employed social policiesas instruments for the economic recovery, in particular, their labour markets. Consequently, Korea has started to examine how to link welfare and labour market policies.

The efforts were not only for extending social protection itself but also forseeking ways to link welfare policies with labour market policies, active labour market policy (ALMP).Employment Insurance and the National Basic Livelihood Security system arethe cases in which the government sought to link welfare and labour marketpolicies.Employment insurance consists of four programmes: an employment stabilizationprogramme, a job skill development programme, unemployment benefitsand maternity and parental leave benefits.While Employment Insurance is designed only for the unemployed whohave paid work experience, the National Basic Livelihood Security systemis for the vulnerable group generally. It basically assists those who make lessthan the minimum cost of living, but it also works as an inducement to makethem participate in or return to the labour market. Thus, the National BasicLivelihood Security scheme is complementary to the Employment Insurancescheme.

In this article, we examine the characteristics of the link between welfarepolicy and labour market policy in Korea, and review the development of ALMPs of Korea since the late 1990s. New strategies reflect the characteristics of the existingwelfare and labour market policies, and simultaneously show the possibility ofinstitutional innovation.Thus, the analysis of the link betweenwelfare and labour market policies in will provide a startingpoint to understand how seek to deal with the problems ofsocial protection and job provision within the existing institutional frameworkof welfare and labour market policies, and enable us to examine the futuredirection of the development of the welfare policies in Korea.