Title: “Six-Country Study of Comparative Welfare Policies”
Researchers: Amnon Aran (City University of London), Silvia Montoya (Universidad Catolica Argentina), Jorge Vasconcelos (IERAL), KIM In-chun (Yonsei University)
Project Duration: Friday-Monday, April 1-August 1, 2011

After more than a decade of widening income gap, a debate is raging in the Korean society about the directions of the country’s social policy: should the state extend the social safety net to the hitherto self-sufficient middle class? There is a growing support in the political class in favor of extending basic social services beyond the low income households, but little is understood with respect to possible poslicy repercussions of such actions. Those in favor of the welfare expansion argue that only the state can solve the downward trend in the population growth and the entrenched unemployment problem among young adults. Policy experts argue that simply increasing social spending usually leads to waste and distortions in the economy.

The objective of the present study is to review the historical welfare policies of six countries that have faced similar challenges that Korea faces today, and inform the policymakers of the lessons learned. We analyze the welfare policies of Argentina, Greece, Israel, Japan, Sweden and the UK. We pay special attention to how social spending may breed entrenched interest groups that can undermine both the economy and social fabrics of the country. We also look for instances in which the state deployed its resources in a manner that lessened social tensions while improving the long term prospect of the economy.