A.1.) Introduction of Employment Insurance System
As the Korean economy has transformed from labor-intensive modes to technology-intensive ones the importance of innovation increased in the 1990s, need for upgrading skills of existing workers became increasingly crucial. In this policy context, Korea introduced the ##3D_LAYER##Employment Insurance System (EIS)##3D_TEXT:1) Yoo et al. (2005). Labour market trends and the employment insurance system in Korea. Korea Labor Institute.##3D_LINK:https://www.kdevelopedia.org/Resources/social-development/labour-market-trends-employment-insurance-system-korea--05201211130123178.do?fldIds=TP_SOC|TP_SOC_EM#.VgNkRtLtlHw##3D_TEXT:2) [Web-link] Employment Insurance System - Republic of Korea.##3D_LINK:https://www.kdevelopedia.org/Resources/social-development/employment-insurance-system-republic-korea--05201512230142753.do?fldIds=TP_SOC|TP_SOC_ED#.VnoiiuasVHU##3D_TEXT:3) [Web-link] Statutes of the Republic of Korea - Employment Insurance Act.##3D_LINK:https://www.kdevelopedia.org/Resources/social-development/employment-insurance-act--05201512230142752.do?fldIds=TP_SOC|TP_SOC_ED#.Vnoiq-asVHU##3D_LAYER_END####3D_LAYER####3D_TEXT:Human Resource Development (HRD) Service of Korea website##3D_LINK:https://www.hrdkorea.or.kr/ENG##3D_LAYER_END## in 1995, which is the backbone of the continuing VET system in Korea.
EIS consists of 3 components:-
(ii) individual employees; and
(iii) the unemployed for their vocational training.
Three programs are financed from Employment Insurance Fund (EIF)##3D_LAYER####3D_TEXT:EIF is collected differently by program. For the unemployment benefit program, both an employer and an employee pay insurance fee by 0.45% of an employee’s annual total wage, respectively. For the employment security and the vocational competence development programs, employers pay insurance fees by 0.25%-0.85% of their employees’ payroll depending on the number of employees.##3D_LAYER_END##.
With the EIS, vocational training in Korea has experienced big paradigm shift:-
In the late 1990s, EIS played a crucial role in providing vocational training for the unemployed whose number rapidly increased due to the ##3D_LAYER##foreign currency crisis (1997–1999)##3D_TEXT:Lee, K.S. (2011). The Korean financial crisis of 1997: Onset, turnaround, and thereafter. WB and KDI.##3D_LINK:https://www.kdevelopedia.org/Resources/economy/korefinancial-crisis-1997--04201304110125755.do?fldIds=TP_ECO|TP_ECO_MA|TP_ECO_FI#.VgCtFNLtlHw##3D_LAYER_END##. Since 2000, EIS has successfully responded to ever increasing demand for continuing training of employees.
A.2.) Vocational Training for SMEs
In 2004, ‘Worker Vocational Competency Development Act’ was enacted to provide more equitable vocational training opportunities for small and medium enterprises (SMEs) and disadvantaged. For SMEs, VCDP provides:-
(i) support to SMEs that form a training consortium with other SMEs in the same industry and vocational training providers;
(ii) support to learning activities and infra building of SMEs that try to become learning organization; and
(iii) free provision of advanced training courses that SMEs cannot take due to high prices.
For the disadvantaged groups, general account of the Ministry of Employment and Labor supports vocational training for female family heads, unemployed youth, self-employed, and defectors from the North Korea. Recently VCDP supports more self-directed individual VT and VT for the unemployed through voucher scheme.
In addition, the new role of higher education institutions as continuing VET providers began to be emphasized. As the skills demanded became more sophisticated and diversified, colleges and universities began to provide VET programs for both employed and unemployed adults.
B. Checking Points
The Korean case of continuing VET implies that when developing continuing VET policies, a country needs to check:-
(i) the speed and level of a country’s economic development that indicate skill demands in terms of quality and quantity, which imply the roles and responsibilities of the governments, employers, and VET providers;
(ii) private sector’s readiness to provide training and take financial burden, vocational training provider’s capacity to provide quality training and employer’s recognition of the importance of training;
(iii) the generation and utilization of information on the performance of VET providers and programs and changes in skill demands; and
(iv) incentives and regulations to induce individual workers’, VET providers’ and employers’ active participation in training market.