Labor Flexibilization after the Foreign Exchange Crisis and Changing Corporate Welfare in Korea

Abstract

The purpose of this study was to empirically test whether corporate welfare in Korea has grown since the mid 1990s. The result of this study shows that after the IMF fiscal crisis, the labor flexibilization policies within labor markets initiated flexible forms of employerprovided benefits. These benefits included cafeteria plan or profit-based funds, which ultimately led to a decline of corporate welfare rather than growth. Existing studies do not agree on a trade-off of statutory and voluntary social provisions since the crisis of welfare state.

Existing studies show that some nations experienced a decline of corporate welfare that coincided with a growth of state welfare, while other nations experienced a decline of state

welfare coincident with a growth of corporate welfare.

Usng the case of Korea, this study suggests an archetypal development of a welfare system that experienced a decline of corporate welfare alongside a growth of state welfare provisions.