The Employment Insurance(EI) has three components job stabilization, job ability development, and unemployment benefits. But, in 1995 when it was first introduced in Korea, job stabilization and job ability development were more focussed than unemploy...
The Employment Insurance(EI) has three components job stabilization, job ability development, and unemployment benefits. But, in 1995 when it was first introduced in Korea, job stabilization and job ability development were more focussed than unemployment benefits, reflecting then full employment situations and policy-makers' emphasis on the functioning of the EI as the active labor market policy. However, since the economic crisis, the EI has experienced enormously rapid changes and these changes have been occurred mainly in unemployment benefits. This implies that, quite different from the expected role of EI at it's early stage, the functional focus of the EI is moving towards income maintenance for the unemployed. This paper explores this changing process and suggested policy implications drived from the process.
Main conclusions in this paper are as follows: first, the roles of the EI should be focused on compensating lost of income by the unemployed. Whether the EI functions well as an active labor policy or not depends on the extent that how effective the EI is as an income maintenance mechanism. Second, the fact that except the EI we have few welfare institutions providing incomes for the unemployed works another contributor to changing focus of the EI from active labor market policy towards income maintenance of the unemployed. Third, while unemployment benefit has been reinforced, it has still far from complete as the income maintenance mechanism, and these limitations should be made up for through various measures.