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[Excerpt] Beginning in November 1997, the Republic of Korea underwent a devastating economic crisis. Declining macroeconomic conditions brought about major labor market disruptions in 1998: a quadrupling of unemployment, a fall of 9% in real wages, informalization of the remaining jobs, increased job insecurity, and rising poverty and inequality. Disadvantaged groups suffered a disproportionate impact. The result was not only economic misery but also social pain: increased homelessness, rising crime, heightened school dropouts, an accelerating divorce rate, and an overwhelming sense of social malaise.

1999 marked a major turnaround for Korea. GDP grew by 10.7%, and real wages are growing apace. The unemployment rate is now less than half of its peak level. Women are again returning to the labor force and are finding employment. A sense of guarded optimism is returning to the Korean society.

Nonetheless, important labor market problems remain (and social problems as well). The unemployment rate now is twice as high as it was before the crisis. But high unemployment is the tip of the proverbial iceberg. Income inequality is 15% higher and poverty is twice as high as before. What recommendations, taking into account cost and other considerations, can be made on the reporting of recommended indicators?


Suggested Citation

Fields, G. S. (2001). The potential role of an employment guarantee scheme in Korea's social safety net [Electronic version]. In F. Park, Y. Park, G. Betcherman, & A. Dar (Eds.), Labor market reforms in Korea: Policy options for the future (pp. 46-52). Seoul: The World Bank & Korea Labor Institute.

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© The World Bank and Korea Labor Institute.