The purpose of this study is to review the present status and characteristics of active labor market policy put in place to counter numerous side-effects detected as Korea's neo-liberalist labor market become flexible and evaluate the effect of the po...
The purpose of this study is to review the present status and characteristics of active labor market policy put in place to counter numerous side-effects detected as Korea's neo-liberalist labor market become flexible and evaluate the effect of the policy in order to seek maturity and advancing of active labor market policy for the future. For this, this study included analyzing various government organizations' official data and existing study documents. For the analysis, this study focused in three schemes-public employment administration service, vocational training, and job creating program- that would be the core schemes among Korea's active labor market policy programs.
Korea's active labor market policy was introduced to alleviate numerous side-effects as the result of active promotion of labor flexibility after the foreign currency crisis. It has rapidly expanded because of the foreign currency crisis in 1997, so therefore, has shorter history than that of western communities. However, with the decline in unemployment and revival of economy, the magnitude of schemes decreased. This was because Korea's active labor market policy had much more meaning as a temporary unemployment measure than the employment policy to reduce employment instability, caused by flexibility in labor market. Korea's labor market seeks continuous flexibility regardless of recovering of economy and decreasing unemployment.
Korea's active labor market policy is executed mainly through the employment insurance system. It is largely divided into employment stability schemes and job ability development schemes and more specifically, they are vocational training, public employment administration service, and so on. Aside from through employment insurance system, the Ministry of Labor also executes active labor market policy such as public works and vocational training for minority classes. Followings are the specific contents of active labor market policy schemes and their results.
First, among the active labor market policies, the public employment administration service is the most effective program compared to the input cost. In Korea, as other active labor market policy programs, since the currency crisis in the 1997, the needs for the program was recognized and the structuring of the system took a launch. In 1998, employment stability center was founded and in 1999, the Work-net, the collective employment information network, went into service. HRD-Net, a collective information network, began its first service in 1997 and continuous system reform has led to an independent form of today. Despite its system reform, Korea's public employment administration service does not fulfill its role as a part of active labor market policy. The reasons are that the number of applicants a service worker or agencies has to handle is just too many compared to those of leading countries, and because the number of qualified insurance recipients has steadily increased, the workload related to the employment market policy such as issuing unemployment payments has been increasing. The rate of finding new jobs through the job search support service, which is one of the most important services the public employment administration service provides, is very low. Despite activation of the Work-net and HRD-Net, searching for information, providing service that is user oriented, cooperation and connection with other organizations, and so on have been cited as the problems.
Second, as a part of job ability development, the vocational training can be considered, as the core of active labor market policy, and "employment promotion training" by the Ministry of Labor for the minority classes and "new job training" by the employment insurance system take up a great portion. Korea's vocational training rapidly expanded due to the introduction of employment insurance system and the currency crisis, but shrunk as the economy seemed to recover. In overall, the employment promotion training's quality does not seem to lack far behind other trainings, but results in the actual employment seemed to fall behind greatly. Furthermore, training courses for finding new jobs for the unemployed does not seem to be successful when finding a job in a field trained so the scheme for finding unemployed a new job seem to satisfy the goal of the active labor market policy. Generally, Korea's vocation trainings offer programs for mostly low functional and not demanding skill jobs and since a source of income is not guaranteed during the training period, many of them cannot continue the training. And the training duration is not long enough to learn all the necessary skills and be proficient so the result is very limited.
Third, the job creation, which the active labor market policy has a great meaning in, is mostly focused in public works and self reliance programs of national basic livelihood guarantee system. Public works programs began as a measure for unemployment that has been rapidly rising since the foreign currency crisis. The budget and manpower involved in the public works programs rapidly increased as well until the economy recovered and the unemployment rate declined, and since, the magnitude of the program greatly decreased. Since the duration of the public works program is limited, it served more as the source of temporary income rather than creating new jobs. The self reliance programs had very limited effect in terms of creating new jobs since the magnitude of the program was so small. The third system employment must be looked into as the new measure to create permanent jobs in pace with trend in aging society and growth with no new hiring.
To summarize, since the introduction along with the employment insurance system in 1995, mostly due to the foreign currency crisis, Korea's active labor market policy, in numbers, expanded, but it served as a temporary unemployment policy and today, the magnitude has been decreasing. Therefore, for Korea's active labor market policy to be a meaningful employment policy, I suggest following measures:
First, numerous independent programs of the active labor market policy must be administered as one integrated program. The connection of vocational trainings and public employment administration service would be the best measure. Especially, different roles for private and public service are necessary.
Second, to up the evaluation and effectiveness of the active labor market policy and develop appropriate ways suitable for Korea, nation-wide stratified (personnel information, industry trend information, corporate information, and geographical information) database must be constructed. Currently in Korea, because of lacking database, policy development, policy evaluation, and policy implementation are not carried on properly.
Third, subjects of the active labor market policy should not be limited to the minority class or the recipients of employment insurance but expanded to "average people" as well.