Tinkering at the margins? Korea’s reform strategies to close the gap between labour market insiders and outsiders

Abstract

Over a relatively short period, Korea has developed a comprehensive welfare state centred on eight social insurance schemes. However, its heavy reliance on contributory social insurance has become increasingly inadequate for protecting atypical and non-regular workers, an expanding segment of the labour market. This article argues that recent reforms have largely expanded protection through institutional layering while leaving the structural limitations of Korea’s contribution-based welfare intact. Drawing on recent policy developments and labour market trends, it shows how contribution-dependent eligibility rules and insufficiently coordinated non-contributory programmes can reinforce labour market dualization. The article proposes reforms that adapt contributory institutions to fragmented employment by broadening contribution arrangements, revising eligibility rules, and ensuring that minimum protection complements rather than competes with social insurance. The Korean case demonstrates that sustainable welfare reform requires modernizing contributory systems so they remain inclusive, equitable, and compatible with increasingly diverse employment patterns.