Labor Market & Employment Policies

* This paper was originally published in Korean in the 38th issue of the Monthly Labor Review published by the Korea Labor Institute in February 2008. 

* Lee, Kyu-Yong  (Research Fellow , Korea Labor Institute, email : leeky@kli.re.kr)


Ⅰ. Raising the Issue

Fiscal job support programs are part of the active labor market policy framework, designed to enhance employability of the marginal groups by providing appropriate sets of policy instruments (subsidy, training, start-up assistance, etc.). In Korea, such programs are run by several government agencies, and the government since 2004 has been publishing overall statistics as a way to review the status quo and ensure program effectiveness. These programs include not only the long-standing ones implemented by different agencies, but also those launched under the Roh Moo-hyeon administration as part of its job creation policy. According to the Planning and Budget Administration, there were total 121 job support programs in 2007: youth unemployment programs (61), social works (40), job support and training for marginal groups (20). The total budget expenditure was 1.9725 trillion Korean won in 2006, and 2.7776 trillion won in 2007 (planned), up 40.8% from the year before. These fiscal job support programs have been subject to largely two types of criticism. First, low level of program effectiveness. Such criticism mostly focuses on the low quality of jobs created and low net job creation effect. Second, existence of similar or redundant programs. This is associated with policy targets, service beneficiaries and policy instruments. In addition to above, some also question whether the policies cover appropriately comprehensive targets, or whether effective policy instruments are being provided to the selected target groups. Whereas the former is a question about the basic principle of these programs - i.e., who are the programs targeting - the latter is about the approach, or how the programs can be designed from a more comprehensive perspective. This study aims to assess the job support programs in the context of these issues. But it does not make for an easy task as there are over 100 programs in existence, and with few systematic datasets available. This in turn implies that a more structured approach is needed to enhance the overall effectiveness of these programs. Thus in this study, the focus will be on how we can better share the issues about job support programs based on their current status. This study is structured as follows. Chapter II reviews the classification of job support programs. Chapter III and IV analyze the programs performance and job matching outcome. Chapter V is the conclusions.