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

Sung Teak Kim
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Sung Teak Kim: Asian Development Bank Institute

No 214, ADBI Working Papers from 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.

Keywords: korean labor market; financial crises (search for similar items in EconPapers)
JEL-codes: I30 I38 J65 J68 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2010-05-10
New Economics Papers: this item is included in nep-ias and nep-sea
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Citations: View citations in EconPapers (4)

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