Labour market policy reform in East Asia: from economic crises to welfare politics

Originally aimed at pursuing a strategy of economic growth (so-called “developmentalism”), governments in East Asia traditionally used labour market policies to support full employment, partly to compensate for a belated and inadequate social protection system. This chapter discusses the cases of Japan, South Korea, and Taiwan, which despite a broadly similar growth model also have some structural differences, also resulting in different labour market policy mixes. As the chapter shows this is particularly evident in the area of active labour market policy. While Japan and Korea tend to rely more on, respectively, employment services and incentives and direct job creation, the Taiwanese government has invested more in training policies. Beyond structural factors, the chapter also discusses other drivers of labour market policy reform in this region, including external shocks and political competition.