From a dualized labor market to a dualized welfare state: Employment insecurity and welfare state development in South Korea

Abstract

What explains South Korea’s underdeveloped welfare system and recent departure from it? The existing scholarship fails to offer a compelling theory that accounts for the trajectory of the Korean welfare state. Finding dominant theories stressing variables such as regime type or globalization inadequate, this article argues that Korea’s dualized labor market has been a critical factor in shaping institutions of social protection. Its labor markets are characterized by segmentation between insiders who benefit from strong employment protection and outsiders who are exposed to a greater degree of labor market risk. Korea’s welfare system, which is built on the provision of welfare benefits to insiders, has replicated this labor market dualism. The recent expansion of social protection also reflects the insider–outsider division, with the interest of insiders being key variables. The weakening of employment protection, or the prospect of it, led this key group to develop an interest in more broad-based social protection programs. Based on this political logic, this article provides an analysis of Korea’s welfare state development.