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The purpose of this paper is to take stock of the social science literature on the East Asian welfare regime that has come around over the last decade or so. It suggests the concepts of the welfare triangle and the welfare diamond as a theoretical framework and then proceeds to discuss the development in Japan and Korea in separate sections, mainly highlighting the significant changes that have taken place, including the demise of life long (male) employment and company welfare and the concomitant increase in public social welfare that took place with democratization. Some elements of continuity are also pointed out such as the important role of state bureaucracies and of land reform. The following section engages with the comparative social policy literature in sub-sections. First few country comparisons of Japan and Korea and of Korea and Taiwan are discussed highlighting the similarities in development, institutional setup and welfare mixes even if Japan was the forerunner. The combined challenges of globalization, demographic changes and pressures from civil society are considered the drivers behind the (partial) universalization of the welfare regime within these states. Next comparative studies that take on many countries in the region are discussed, highlighting the reaction to the financial crisis in 1997. The last section tries to conclude this overview of the welfare modeling business in East Asia, by suggesting that, despite considerable variation across the region, there are enough commonalities to warrant the assumption that they belong to the same overall welfare regime. However, it is not particular to East Asia; it is shared with Southern Europe and Latin America. For lack of better terms, it is called the informal care regime.

This paper explores the nature of the newly emerging welfare state in Korea. There is a growing consensus that a welfare state has been emerging over the 1997 economic crisis. Social policy reform has been implemented in Korea during the past decade. A major tool for the reform was expanding universalistic social insurance programs like those in western welfare states. A modernized public welfare system has been institutionalized as well.

Many experts have debated about the characteristics of the social policy reform. Some scholars maintain that the reform aimed at promoting social solidarity and resulted in an increased state involvement in social welfare provision. Yet, some critics have argued that the government implemented a labor market reform which led to employment insecurity and that the social security expansion was essentially a subsidiary tool for the labor market reform. Some of them characterize the emerging welfare state as neo-liberal. Others call it a productivist welfare capitalism.

This paper analyzes labor market changes during the past decades and finds that this criticism is not consistent with available evidence. The number of workers in non-regular employment has been rapidly increasing, as the critics indicated. Many low-income families have not gained many benefits from the reformed social security system due to the unsecure employment status. It is found, however, that non-regular, low-wage workers have been increasing not due to a neo-liberal labor market reform, but due to the labor market duality. The dual labor market, characterized by the coexistence of overprotected regular workers and under-protected non-regular workers, is a legacy of the authoritarian developmental state during the industrialization period.

This paper concludes that a western welfare state strategy mainly relying on universalistic social insurance systems may not be so effective in protecting disadvantaged families in Korea. The future of Korean welfare state may hinge on inventing a successful strategy for lessening the labor market duality.

Holliday (2000) proposed a model called 'productivist welfare capitalism

(PWC),' emphasizing that social policy in East Asia is an important policy

instrument for facilitating economic development rather than protecting

citizens from social contingencies and poverty. However, despite their

similarities as productivist welfare states, a gradual but marked sign of

divergence has emerged in the region, especially since the 1997 Asian

financial crisis. The recent expansion of social protection in some

countries (e.g. South Korea and Taiwan) leads scholars to raise a question

about the usefulness of the concept of PWC. This research sets out to

address this question based on the following two puzzles:

 

First, is there a systematic variation of productivist welfare state in

East and Southeast Asia? If so, how can we contain their similarities and

differences in a single model? How many clusters can we distinguish under

the productivist framework?

 

Second, if there is a systematic divergence, what is behind it? What are

the major determinants differentiating the course of productivist welfare

development in the region?

 

Regarding the first question, this research presents a model derived from

two theoretical dimensions - redistribution and efficiency - and carries

out cluster analysis on 12 countries to verify the existence of three

subcategories of PWC (compensatory, competitive, and mixed). In the second

part, this study examines economic and political variables to identify the

causal configuration that generates the divergence of PWC in East and

Southeast Asia. The main argument is that the type of financial system and

the political regime type play a critical role in formulating the pattern

of social policy development in the region. Based upon annual observations

of public expenditures and institutional platforms of social policy, this

research conducts MLE analysis to test the argument.