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KDI - Korea Development Institute

KDI - Korea Development Institute



Research Monograph Redesigning Safety Nets as a Response to New Challenges December 31, 2021


Series No. 2021-02

Research Monograph KOR Redesigning Safety Nets as a Response to New Challenges #Employment·Unemployment #Vocational Education #Welfare Policy #Poverty, Income Redistribution #Health Economics
DOI P-ISBN979-11-5932-702-5 E-ISBN979-11-5932-713-1

December 31, 2021

  • 프로필
    LEE, Youngwook
  • 프로필
    KWON, Junghyun
  • 프로필
    HAN, Joseph
  • KDI
    PARK, Yoonsoo
The safety net faces new challenges. Non-regular workers are increasing with diversifying forms of employment, but the current safety net does not protect these new types of workers. The COVID-19 crisis highlights the lack of protection for these workers in our existing safety net. Also, the transition to a digital and eco-friendly economy is expected to trigger drastic changes in jobs and put burdens on the most vulnerable workers, which requires strengthening the safety net.

This study examines the limitations of the current safety net in rapidly changing economic and social conditions and provides ways to restructure it in response to new challenges. This study consists of four chapters: income support system, employment safety net, adult education and training, and safety net for sick workers. These four fields have revealed major problems in the COVID-19 crisis and need to be addressed and strengthened to build a comprehensive safety net.

Chapter 1 examines the effectiveness of the income support system during the COVID-19 period and provides an overall evaluation of the system in terms of inclusiveness, poverty reduction, economic responsiveness, and consistency. Chapter 2 analyzes what causes blind spots in the employment safety net and estimates a structural model, including unemployment insurance for the self-employed and unemployment assistance, to suggest policies for a comprehensive employment safety net. Chapter 3 investigates the characteristics of users and non-users of adult education and training voucher programs and examines why the most vulnerable groups in need of the programs do not use vouchers. Chapter 4 analyzes the state of the safety net supporting sick workers and examines the impact of health shock on employment and income to provide implications for the design of sickness benefits.

These four chapters share a common concern about the safety net's wide blind spots, especially for vulnerable workers, and discuss policy tasks. First, the employment safety net does not provide protection for temporary, non-regular workers and the self-employed due to limited unemployment insurance coverage. Also, income support programs for the working-age group are not responsive to economic needs, and support against economic difficulties is insufficient. This study suggests strengthening unemployment assistance for the low-income and vulnerable workers to enhance the inclusiveness and economic responsiveness of the safety net. Second, although anyone can participate in adult education and training institutionally, the actual participation rate of the vulnerable is low. This study points out that it is important to induce their actual participation, not simply an external expansion. Third, insecure workers are less likely to access sick leaves than secure workers. Due to the disparity across workers, sickness benefits under discussion for adoption may also have practical blind spots for vulnerable workers. This study discusses policies that need consideration when designing sickness benefits to provide a secure safety net for sick workers.
General Overview and Summary

Chapter 1: Current Status and Restructuring Discussion of Income Security System
Section 1: Introduction
Section 2: Income Trends and Income Support Effect due to COVID-19
Section 3: Overview of Income Security Policy
Section 4: Review of Income Security Policy
Section 5: Discussion on Restructuring of Income Security System

Chapter 2: Establishment of a Universal and Sustainable Employment Safety Net
Section 1: Unemployment Insurance and Unemployment Support
Section 2: Current Status of Employment Insurance Blind Spots
Section 3: Real Blind Spot: Analysis of the Cause of Non-participation in Employment Insurance by Applicable Persons
Section 4: Institutional Blind Spot: Self-employed
Section 5: Structural Model on Unemployment Insurance and Unemployment Support
Section 6: Conclusion

Chapter 3: Current Status and Tasks of Using Adult Education·Training Vouchers
Section 1: Introduction
Section 2: Swiss Education Voucher Experiment
Section 3: Usage Status of National Learning Card for Tomorrow
Section 4: Usage Status of Lifelong Learning Voucher
Section 5: Summary and Conclusion

Chapter 4: Policy Proposal for Establishing a Safety Net for Ill Workers
Section 1: Introduction
Section 2: Workers' Health, Working Environment, and Safety Net Status
Section 3: Employment and Income Changes of Ill Workers
Section 4: Summary of Results and Policy Implications

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