Promoting Work: A review of Active Labor Market Policy in Taiwan

Taiwan has experienced the structural change in labor market after 1996 due to the intensified globalization and deindustrialization trend in general, and the increasing outflow FDI investment in China in particular. The unemployment rate has increased above 2% since 1996 and reached around 5% in 2002 and 2009 respectively. A series of policy measurements have been adopted to address the unemployment problems: the legislation of Unemployment Insurance Act (2002), The Act for Protecting the Massive Laid-Off Workers (2005), Projects for Sustainable Job Creation (2002-), Wage Subsidy Programs (2003-2010), Decentralizing Work Training Programs (2000).

The above mentioned programs focused on unemployed workers. Most of the target groups are male aged workers (50-65), which are specified as 'old-risks'affected groups. However, new groups also emerge during the industrial reconstruction process: the lone parents, youth workers and disabled workers. They are categorized as the affected groups of 'new risks'. After 2008 financial crisis, it seems these groups have become the focal groups of Taiwan's active labor market policy (ALMP). The policy considerations are more related to the so called 'social investment' strategy and linked to the consideration of adapting to knowledge-based post-industrial economy.

The economic development model of Taiwan had been characteristic with 'growth with equity' and enjoyed low unemployment rate with hyper-growth during 70's-80's. However, the structural change and challenges from globalization and deindustrialization pose huge challenges to the labor market in Taiwan. This paper aims to evaluate the policy outcomes of the policy measurements since 2000 for addressing the problem of working poor. Comparing with other East-Asian countries, the characteristics of Taiwan's work-welfare governing system and its nexus will also be examined in the final discussion.