In 2016, persons of working-age made up 72.9 per cent of the total population of the Republic of Korea. In order to maintain income security for this large group, the Government of the Republic of Korea has been implementing active labour market programmes as part of its Employment Insurance System (EIS) since 1995. The EIS upholds the 1993 Employment Insurance Law and promotes employment, vocational competency and provides financial support and re-employment assistance for unemployed persons. The Republic of Korea’s Ministry of Employment and Labour is responsible for managing the EIS.
Income security schemes within the EIS are accessible to all businesses in the formal and informal sector with one or more employees. The EIS is comprised of three main programmes, the Employment Stabilisation Programme, the Vocational Competency Development Programme and the Unemployment Benefit Programme. In addition to these, maternity and childcare benefits are also available. The Unemployment Benefit is available to all residents who have contributed for one year and provides job-seeking allowances that aim to stabilize living conditions and employment promotion allowances that promote early re-employment. Under the EIS eligible working-age residents are entitled to receive 50 per cent of their average salary six months prior to unemployment, for a period up to six months. Further support calculated at 70 per cent of their unemployment benefit is available for: 1) up to two years for job seekers who have been ordered to enroll in vocational training, 2) up to 60 days for claimants in difficult family and livelihood situations; and, 3) up to 60 days for claimants who did not find reemployment after six months and face difficult reemployment situations. The EIS provides 80 per cent of regular workers in the Republic of Korea with access to resources for capacity building and income security during unemployment.
The Republic of Korea’s EIS has emerged from a national debate that began at the end of the 1960s followed by formal debate in the upper levels of government in the early 1980s. Concerns over the increasing financial burden to businesses caused delays in the launch of the EIS. However, in practice the system has helped build a strong work force and stabilize the market during times of economic instability. Investments in income security, like the EIS, form an important part of the Republic of Korea’s social protection floor and protect fundamental rights of the working-age population.
Further Reading:
- Sung Teak Kim (2010). Korea’s Unemployment Insurance in the 1998 Asian Financial Crisis and Adjustments in the 2008 Global Financial Crisis. Asian Development Bank Institute, Tokyo. Accessed from http://www.adbi.org/files/2010.05.10.wp214.korea.unemployment.insurance.1998.2008.gfc.pdf on 22 July 2013.
- Supplementary reading provided by Asia.org, accessed from https://think-asia.org/handle/11540/3802 on December 2016.