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- Title
- The Policy Implications of European Welfare Model Development and Reformation
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- Author
- Ahn, Soon Kwon
- Type
- Research Reports
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- Subject
- Population/Welfare, Study on System
- Publish Date
- 2006.12.27
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- File
- -
- View Count
- 28613
This paper not only investigates the development and characteristics of European Welfare Model, which Vision2030, Korean government's long-term development plan, might pursue in order to improve the welfare of Korean people, but explains and compares the economic and social policies as well as the reformation of the welfare states of United Kingdom, Sweden and Germany, the representative nations for each type of welfare state classified such as Nordic countries, Anglo-Saxon countries, Continental countries. The case study on the European welfare states shows the following implications for Korea. First, Vision2030 aims not only to enhance the ratio of social expenditure to GDP exceedingly faster than European welfare states, which increased social expenditure rapidly at the golden age of 1960-1975 period, but to design the increasing rates of Korea's social expenditure to exceed the economic growth rates more largely than European countries did at the same period. Therefore, it is recommended for Korea to raise the potential growth rate by improving growth engine or adjusting the increasing rate of social expenditure downward at the government budget scheme. Second, in response to both the rapid low-birth rate and aging and the sharp increase of a national pension payment after around 10 years, it is recommended to minimize the possibility of causing the welfare disease experienced by European countries by constructing basic frame of welfare policy in harmony with growth. In this regards, it is necessary to reform four pension system including national pension, public servant pension and health insurance, as well as to restructure the government and public sector for higher efficiency.
Third, there is a limit to alleviate the income inequalities only by the redistribution policy and the intervention of government, therefore it is necessary to execute other policies except redistribution policy such as education opportunities for low income class children, creating jobs for young generation, repechages for failed entrepreneur and opportunity for job-seekers of 40's and above.
Fourth, it is highly recommended for government to create jobs by alleviating regulations and building up the business environment in harmony with the market economy following United Kingdom, Sweden and Germany.
Finally, Sweden model and German model would not fit to Korea, which should enter the advanced country by achieving US 30,000 per capita within 10 years in the severe competition with Japan, China and India, therefore it is desirable to set Korean welfare model pursuing the construction of welfare state, which puts importance on growth strategy and expands the social expenditure gradually in line with the development of economic power subject to maintaining the sustain ability of public financing.
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