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Korea's Unemployment Insurance in the 1998 Asian Financial Crisis and Adjustments in the 2008 Global Financial Crisis

Author

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  • Kim, Sung Teak

    (Asian Development Bank Institute)

Abstract

This paper analyzes the impacts of the 1998 and 2008 financial crises on the Korean labor market. We study the historical background of the Korean Employment Insurance System and the change of labor policies from the 1998 Asian financial crisis to the current 2008 global financial crisis. While it is arguable to say that the expansion of the social welfare system in the Republic of Korea is main source of difference between the two crises, it is certain that the social welfare system is one of the influential factors that helped overcome the problems of the global financial crisis. From an analysis of the Korean experience on the two financial crises, we can deduce the following. First, financial stability at the national level is important to stabilize employment. Second, countries need to develop a social welfare system ahead of any economic crisis. Third, layoffs should be the last resort to lowering labor costs, even at a time of recession. Finally, cooperation and coordination among government departments are crucial to overcome the crisis in labor market.

Suggested Citation

  • Kim, Sung Teak, 2010. "Korea's Unemployment Insurance in the 1998 Asian Financial Crisis and Adjustments in the 2008 Global Financial Crisis," ADBI Working Papers 214, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:0214
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    File URL: http://www.adbi.org/working-paper/2010/05/10/3784.korea.unemployment.insurance.1998.2008.gfc/
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    Cited by:

    1. repec:ilo:ilowps:484309 is not listed on IDEAS
    2. repec:ilo:ilowps:994835833402676 is not listed on IDEAS
    3. Ahn, Taehyun, 2018. "Assessing the effects of reemployment bonuses on job search: A regression discontinuity approach," Journal of Public Economics, Elsevier, vol. 165(C), pages 82-100.
    4. repec:ilo:ilowps:483583 is not listed on IDEAS

    More about this item

    Keywords

    korean labor market; financial crises;

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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