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Public Social Spending in Korea in the Context of Rapid Population Ageing

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  • Randall S. Jones
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    Abstract

    Faced with exceptionally rapid population ageing, Korea should address obstacles that lower fertility rates while encouraging higher labour force participation, particularly among women. While public social spending is currently very low, there is pressure for increased outlays on pensions, healthcare, long-term care and social assistance. The government should be cautious in expanding spending, taking into account the impact on economic growth. Outlays should be limited by shifting from direct provision of social services, notably childcare and long-term care, in favour of providing vouchers to consumers. Given the limited coverage of the public pension system, the new means-tested benefit for the elderly will be useful in reducing poverty. It is important to increase transparency about self-employed income to ensure fairness in the financing of social insurance systems, including the new long-term care insurance. The rise in inequality and relative poverty should be reversed by reducing labour market dualism. Les dépenses sociales en Corée dans le contexte d'un vieillissement démographique rapide Confrontée à un vieillissement démographique exceptionnellement rapide, la Corée se doit d’éliminer les obstacles qui font baisser les taux de fécondité tout en encourageant l’augmentation des taux d’activité, en particulier chez les femmes. Si les dépenses sociales sont actuellement très faibles, des pressions s’exercent sur les pouvoirs publics pour qu’ils augmentent les dépenses consacrées aux retraites, à la santé, aux soins de longue durée et à l’aide sociale. L’État devra se montrer prudent en la matière, en tenant compte de l’impact de la hausse des dépenses sur la croissance économique. Pour limiter les dépenses, il devrait substituer à la fourniture directe de services sociaux – notamment dans le domaine de la garde d’enfants et des soins de longue durée – une approche fondée sur la distribution de chèques-services aux consommateurs. Compte tenu de la couverture limitée du régime public de retraite, la nouvelle prestation de vieillesse soumise à conditions de ressources devrait apporter une contribution utile au recul de la pauvreté. Il est important d’améliorer la transparence des revenus issus du travail indépendant pour garantir l’équité dans le financement des régimes d’assurance sociale, y compris le nouveau régime d’assurance des soins de longue durée. Pour enrayer la hausse des inégalités et de la pauvreté relative, il y a lieu de réduire le dualisme du marché du travail.

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    File URL: http://dx.doi.org/10.1787/241545746547
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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 615.

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    Date of creation: 15 May 2008
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    Handle: RePEc:oec:ecoaaa:615-en

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    Keywords: labour markets; Korea; population ageing; long-term care; pension reform; non-regular workers; labour force participation; income inequality; Vision 2030 Plan; healthcare; relative poverty; social spending; fertility; National Pension Scheme; programme Vision 2030; régime national de retraite; marché du travail; soins de longue durée; fécondité; inégalité des revenus; pauvreté relative; dépenses sociales; réforme du système de retraite; santé; Corée; taux d'activité; travailleurs non réguliers; vieillissement démographique;

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    Cited by:
    1. Kross, Karmo, 2013. "Developmental welfare capitalism in East Asia with a special emphasis on South Korea," Discourses in Social Market Economy 2013-05, OrdnungsPolitisches Portal (OPO).

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