Chapter 6: Social Safety Net for the Working Poor in Japan, Korea and Taiwan
Norimichi Goishi Introduction After the 1997–98 economic crisis in East Asia, inequity and poverty in Japan, Korea and Taiwan have soared, accompanied by an increase of non-regular workers and the working poor. Conventional social security and welfare systems are ill-equipped to handle this new challenge, referred to as ‘new poverty’. Each government has introduced activation policies to increase employment, while also striving to avoid large increases of financial injection. This differs from the activation policies of Europe, where analogous budgets generally constitute a much higher proportion of GDP. Although these three countries share many common aspects, their remaining issues differ greatly due to labour market structures and existing social safety nets. This chapter examines recent reforms for the working poor in Japan, Korea and Taiwan by analysing poverty improvement rates based on social security and poverty dynamism through utilizing panel data for the three countries. After the economic crisis, Korea boldly reformed its social safety net. It has not only expanded its coverage of public assistance and employment insurance, it has also introduced the Social Enterprise Promotion Act or Earned Income Tax Credit. Its income redistribution effect, however, is limited on the whole. The development of social security in Taiwan was limited before 2000. Since then it has introduced many reforms, including unemployment insurance in 2003. Yet the panel data for Taiwan used here suggests that its impact on poverty improvement is rather limited, similar to Korea. Arguably, Japan’s social security system is the most developed of the three...
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