Kyo-seong Kim (Ph.D.) Chung Ang University

1. Performance of Korean Welfare System in the DJ Administration Kyo-seong Kim (Ph.D.) Chung Ang University

2. Introduction 1. Background • Areas of social welfare policy have experienced sweeping changes under the DJ Administration. • In general, this welfare reform have received positive evaluations. • The welfare reform under the DJ Administration should be evaluated as astonishing as welfare innovations achieved in the UK in the latter period of the Second World War and in the US during the Great Depression (Sung, 2001). • If the welfare reform is continued, Korea could be the first country to start from an underdeveloped country after the Second World War and enters the welfare state (Kim, 2005).

3. Introduction 2. Major Purpose • Examine contents of welfare reform under the DJ Administration. • Analyze efforts for expansion of state welfare and results based on two dimensions of time and space. • Evaluate DJ Administration’s welfare reform.

4. Methods Social Welfare Expenditure Poverty Rates Gini Coefficients Coverage Benefit level Analyze Efforts & Results Evaluate welfare reform Examine contents of welfare reform Compare before & after Compare Korea with other Advanced Countries Cluster Analysis

5. Welfare Reform in the DJ Administration 1. Coverage Expansion • Expansion of National Pension Scheme (NPS) to the entire population. • (2) Expansion of Employment Insurance (EI) and Workmen's Accident Compensation Insurance (WACI) to all work places with less than one employee. 2. Extension of Benefit Level (1)Extension of unemployment benefit period. (2) Increasing the amount of benefit in EI & WACI. (3) Reduction of replacement ratio in NPS.

6. Welfare Reform in the DJ Administration 3. Enactment of National Basic Livelihood Security Act • Revocation of demographic criterion in the eligibility • test. • (2) Introduction of conditional recipients based on the • idea of workfare. • (3) Extension of benefit level.

7. Government Budget in % of General Account Source : Ministry of Health & Welfare (www.mohw.go.kr)

8. Social Expenditure in % of GDP Source : OECD (2004) Social Expenditure Database, 1980-2001 (www.oecd.org)

9. Social Expenditure by Major Policies Source : Ministry of Health & Welfare (www.mohw.go.kr)

10. Coverage Expansion Source : ILO (1992) International Labour Conventions & Recommendations, 1919-1991 (Recommendations 102, 103, 128, 130, 134, 168, 176) Data : Korean National Statistics Office(NSO), Corporations of Social Insurance Notes : E : Employee, EAP : Economically Active Population

11. Poverty Rates Data : NSO (1996-2002) Income & Expenditure Survey of Urban Households Notes : Setting the poverty line at 50% of median income.

12. Gini Coefficients Data : NSO (1996-2002) Income & Expenditure Survey of Urban Households

13. Effects of Tax & Transfer in Reducing Poverty Source : Föster & D'Ercole (2005) Income Distribution and Poverty in OECD Countries in the Second Half of the 1990s (www.oecd.org)

14. Clustering 1995 2003 Method : Cluster analysis with z-scores of social expenditure(%), maturation of social insurance(year), relative poverty rate(%), gini coefficient, using the method of ward linkage, squared euclidean distance.

15. Conclusion Findings • Efforts and results for expansion of state welfare are worth recognizing in some degree. • However, the level of state welfare is still lagging behind compared with those of advanced countries. Discussions • More radical changes such as enactment of family allowance and sickness allowance are needed. • More development in social service area is necessary.