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Promoting Social Cohesion in Korea

Author

Listed:
  • Randall S. Jones

    (OECD)

  • Satoshi Urasawa

    (OECD)

Abstract

Korea faces the challenge of reversing rising inequality while sustaining robust economic growth. Welltargeted increases in Korea’s low level of social spending are needed to fill holes in the safety net, especially for the elderly. The development of social security depends on closing gaps in coverage, which are due in part to labour market dualism. Dualism creates serious equity concerns, as non-regular workers face significantly lower wages, precarious jobs, less coverage by social security and less training. A comprehensive approach is required to break down dualism, including reduced employment protection for regular workers, improved social insurance coverage for non-regular workers and expanded training of non-regular workers. Education reforms are also needed to promote inclusive growth, notably by: i) improving the access of low-income children to high-quality early childhood education and care; ii) reducing reliance on private tutoring, notably at hagwons; and iii) expanding income-contingent loans to tertiary students. Promouvoir la cohésion sociale en Corée La Corée doit s’attacher à inverser le creusement des inégalités tout en soutenant une croissance économique vigoureuse. Des hausses ciblées des dépenses sociales actuellement peu élevées de la Corée sont nécessaires pour combler les lacunes du filet de protection sociale, en particulier pour les personnes âgées. Pour développer la sécurité sociale, il faut combler les lacunes de la couverture, lesquelles résultent en partie du dualisme du marché du travail. Ce dualisme engendre de graves problèmes d’équité, car les travailleurs temporaires perçoivent des salaires nettement inférieurs, occupent des emplois précaires, bénéficient d’une couverture sociale plus limitée et d’un moindre accès à la formation. Il faut adopter une approche globale pour briser le dualisme, notamment en réduisant la protection de l’emploi pour les travailleurs réguliers, en améliorant la couverture sociale pour les travailleurs temporaires et en développant les formations offertes à ces travailleurs. Des réformes de l’éducation sont également requises pour promouvoir une croissance inclusive, notamment: i) en améliorant l’accès des enfants issus de milieux pauvres à des services d’éducation et d’accueil des jeunes enfants de qualité; ii) en réduisant le recours au tutorat privé, notamment aux hagwons; et iii) en accordant aux étudiants de l’enseignement supérieur davantage de prêts remboursables en fonction de leurs revenus futurs.

Suggested Citation

  • Randall S. Jones & Satoshi Urasawa, 2012. "Promoting Social Cohesion in Korea," OECD Economics Department Working Papers 963, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:963-en
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    File URL: http://dx.doi.org/10.1787/5k97gkdfjqf3-en
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    References listed on IDEAS

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    1. Willem Adema & Pauline Fron & Maxime Ladaique, 2011. "Is the European Welfare State Really More Expensive?: Indicators on Social Spending, 1980-2012; and a Manual to the OECD Social Expenditure Database (SOCX)," OECD Social, Employment and Migration Working Papers 124, OECD Publishing.
    2. Lawrence M. Kahn, 2012. "Labor market policy: A comparative view on the costs and benefits of labor market flexibility," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(1), pages 94-110, December.
    3. Kang, Byung-Goo & Yun, Myeong-Su, 2008. "Changes in Korean Wage Inequality, 1980?2005," IZA Discussion Papers 3780, Institute for the Study of Labor (IZA).
    4. Andrea Bassanini & Jørn Henrik Rasmussen & Stefano Scarpetta, 1999. "The Economic Effects of Employment-Conditional Income Support Schemes for the Low-Paid: An Illustration from a CGE Model Applied to Four OECD Countries," OECD Economics Department Working Papers 224, OECD Publishing.
    5. Isabell Koske & Jean-Marc Fournier & Isabelle Wanner, 2012. "Less Income Inequality and More Growth – Are They Compatible? Part 2. The Distribution of Labour Income," OECD Economics Department Working Papers 925, OECD Publishing.
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    More about this item

    Keywords

    Basic Livelihood Security Programme; basic old-age pension; childcare; Corée; crédit d’impôt sur les revenus du travail; dualisme du marché du travail; dépenses sociales; EAJE; earned income tax credit; ECEC; education; hagwons; hagwons; income inequality; inégalité des revenus; Korea; Korean economy; labour market dualism; non-regular workers; pauvreté relative; Programme de garantie du minimum de subsistance; relative poverty; services sector; social spending; student loans; système éducatif; travailleurs non réguliers; économie coréenne;

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I2 - Health, Education, and Welfare - - Education
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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