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Evaluating the social security subsidy program in Korea

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Evaluating the social security subsidy program in Korea04



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Title Evaluating the social security subsidy program in Korea
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Material Type Videos
Author(English)

Korea Development Institute

Publisher

[Sejong] : Korea Development Institute

Date 2016-09
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Social Development < Social Welfare
Government and Law < Political Development
Holding Korea Development Institute
License

Abstract

Job creation programs for boosting employment have been on the rise in Korea following the 1997 Asian financial crisis. Currently, 196 programs are in operation under 25 ministries, with a budget of 16 trillion won in total. The job creation programs can be classified into six categories: Unemployment Benefits provide the unemployed with financial assistance for living expenses. Employment Services provides information to and support to those searching for employment. Vocational Training and Start-up Support help foster capabilities needed gain reemployment. For cases these programs do not help much, the government provides subsidies for employment, and even directly provides temporary jobs in the public sector. In early 2016, the government and KDI thoroughly examined the full set of job creation programs for an overhaul. Vocational training is an important public program which is designed to make the unemployed to have the right skills demanded in the market. However, because of tight control over training fees and procedures, the training agencies fail to provide the skill that matches market demand. As a result, the program participants have a very low chance of finding a job after completing the training. Furthermore, among those who find a job, only one out of ten ends up with a job requiring the skills she is actually trained for. If the problem is not a mismatch nor information shortage, then the government provides subsidies for employment. The employment subsidies have to be given for a clearly targeted group because they may generate unintended consequences that subsidized workers crow out non-recipient workers.