"Welfare Spending Should Focus More on Unemployment and Caregiving Burdens Than on Old Age or Illness" - National Assembly Budget Office

Although welfare spending in Korea has increased significantly in recent years, it still falls short of the average among member countries of the Organisation for Economic Co-operation and Development (OECD). Additionally, spending is relatively concentrated in the health and old-age sectors, leading to criticism that preventive measures and support for life transitions—such as unemployment or caregiving burdens—are insufficient. As a result, experts suggest that future welfare expenditure restructuring and the introduction of new systems should focus on these policy gaps.

According to Ahn Taehun, Analyst at the Social Administration and Project Evaluation Division of the National Assembly Budget Office, the report titled “Korea’s Welfare Expenditure Level and New Tasks in International Comparison,” released on March 10, highlights that while Korea’s public social welfare spending is growing rapidly, there remains significant room for improvement in both spending structure and the scope of policy responses.

As of 2021, Korea’s public social welfare expenditure amounted to 337 trillion won, representing 15.2% of its gross domestic product (GDP), which is still below the OECD average of 22.1%. However, between 2011 and 2021, the annual average growth rate was 12.2%, which is about twice as fast as the OECD average of 5.7%.

Looking at the expenditure structure, among the nine major policy areas, health (113 trillion won), old-age (75 trillion won), and family (34 trillion won) recorded the largest amounts, with these three sectors accounting for about 65.8% of the total spending. While these three fields make up a significant proportion, areas such as unemployment, caregiving, and support for risks during life transitions remain relatively underfunded.

The report explains that this indicates welfare policies are mainly designed to focus on treatment of illness and income security after retirement, whereas they are insufficient in addressing new social risks arising from changes in the labor market or family structure.

Ahn emphasized that “due to social structural changes such as low birth rates, population aging, and greater labor market flexibility, individuals now face a wider variety of risks throughout their lives,” adding, “Going forward, welfare policy needs to evolve from simply offering post-event compensation to focusing on prevention and responses throughout the life cycle.”

Key areas identified for policy strengthening include: employment safety nets to mitigate income gaps after job loss; family and caregiving support policies to reduce caregiving burdens; and measures to address risks that occur during transitions within the labor market. Issues such as career interruptions, short-term unemployment, and family caregiving burdens are areas where the current welfare system does not provide sufficient support, making them core challenges for future welfare policy.

This content was produced with the assistance of AI translation services.