Istanbul Technical University - Women’s Studies Center (ITU-WSC)
Working Paper Series on
Work-Family Balance and Gender Equality:
A North-South Policy Perspective[1]
Work-Family Balance Policies beyond Social Welfare:
An intervention against the Economic Crisis in South Korea
Ito Peng[2]
October 2013
Introduction
In the Republic of Korea (hereon Korea) gender and demography meet politics like in no other places. Since 2000, Korean government substantially increased its support for and public investments in child and elderly care. Reasons for this are primarily demographic and economic, but different political actors also saw within the framework of such social investment policy answers to different social and economic problems.
Social investment policy in Korea is framed in terms of a win-win proposition: it builds human and social capitals that contribute to social cohesion; and it creates demand and jobs that contribute to economic growth. It is argued that public investment in child and elderly care would not only relieve women of care burden, enabling them to reconcile work and family responsibilities, but also result in better use of women’s human capital and encourage fertility.
In this paper I focus on recent child care policy reforms in Korea, and discuss how they were motivated by a combination of concerns about fertility decline and low economic growth, and how political actors sought to address these problems through child care. I argue, first, that the Korean case illustrates how economic crisis can open a door to positive changes, and second, investing in social care can create conditions for economic growth. The first part of the paper provides an overview of trends and patterns in women’s labour market status and gender division of labour and their interaction in Korea. The second part will describe the care regime in Korea, particularly in terms of time, services, and money. This will be followed by a discussion of recent policy changes, focusing in particular policymaking process involving childcare reform. Finally, the last part assesses the effectiveness of policies implemented.
1. Context: A different kind of North-South dilemma
Korea faces many problems associated with advanced industrial nations, while at the same time it struggles to overcome some of its developing nation legacies. Like many advanced industrial countries, there has been an erosion of male breadwinner model households due to de-familialization and labour market restructuring, and a growing care crisis resulting from a combination of increased women’s labour market participation, low fertility, rapid population ageing, and lack of non-familial sources of care. The erosion of the male breadwinner households is caused by employment insecurity and decline in male family wages. The trend towards greater household income equality achieved during the second half of the 1980s as a result of strong economic growth and political democratization was reversed after the Asian economic crisis of 1997 and led to a relative widening of the household income gap (Lee, 2002; KLI, 2008b). The post-1997 economic reforms weakened the employment protection and expanded non-standard or non-regular employment, i.e. workers on temporary, daily, part-time contingent work arrangements with limited or no access to social security schemes and variety of rights and benefits enjoyed by standard or regular employees.[3]
In 2000, 52 per cent of all waged workers in Korea was in non-standard employment (KLI, 2005). Wage gap between standard and non-standardworkers, and between workers in large and small-and-medium size companies increased and continue to remain large (KLI, 2008; Grubb, Lee and Tergeist, 2007). Women’s employment rate has been increasing steadily: married women’s employment rate rose from 41.0 per cent in 1985 to 49.9 per cent in 2007, while unmarried women’s rate increased from 44.7 per cent to 51.3 per cent, respectively (KWDI, 2008).
Total fertility rate in Korea dropped from approximately 4.5 in 1970 to 1.08 in 2005, making it the lowest fertility nation amongst the OECD today (KNSO, 2008; KWDI, 2008; also see Figure 1). Assuming the current rate of fertility, demographic projections suggests an increase in the proportion of 65+ population from 7 per cent in 2000 to 20 per cent by 2026 (KNSO, 2008), and labour shortage of 4.8 million workers by 2020, particularly in the low wage and service sector employment (Ministry of Labor, 2006). Moreover, beginning in 2030, the total population will begin to decline (Kim, 2000). Unlike many other OECD countries, demographic shifts present an additional policy problem in Korea because of its longstanding national narrative of population homogeneity. Korea has never regarded itself as an immigrant receiving nation; but instead, an immigrant sending nation. Therefore, until very recently, public and policy debates surrounding the issues of low fertility and labour shortage have focused on the two pronged strategy of pronatalism and mobilization of women and the elderly. The current demographic condition, however, has made the issues of immigration and foreign workers unavoidable (Seol, 2006; Lee, Seol, and Cho, 2006). Even so, policies so far have been limited to accepting immigrants through marriage and to allowing specific kinds of foreign workers to enter the country on a time limited work visas.
At the same time Korea struggles with advanced industrial nation problems, it also continues to face a number of developing nation legacies, particularly the large informal sector economy and underdeveloped welfare state. Although the proportion of informal sector employment (for most part in the form of unpaid family workers and own account workers) has declined since 1980, it still comprised 27 per cent of all employment in 2007 (OECD, 2008) (Table 1).[4] Unsurprisingly, informal employment in Korea is more prevalent in small businesses. It is estimated that informal employees in Korea make up approximately 70 per cent of employees in firms with less than 10 people, and that 58 per cent of all informal employees are employed in small businesses (OECD, 2008: 14). Women are also significantly more likely to be in informal work compared to men.
Despite the significant expansion since 1990, Korean welfare state is still one of the smallest amongst the OECD, with total social expenditure to GDP of 2.9 per cent in 1990 and 6.9 per cent in 2005 as compared to the OECD average of 20.6 per cent in 2005 (OECD, 2008c). Because pension was universalized as late as in 1999, only 45 per cent of men and 6 per cent of women over the age of 65 are currently in receipt of the National Pension benefits (KIHASA, 2007). Moreover, there also remains a remarkable lack of gender equality in the Korean labour market, despite the noticeable social and normative changes over the last few decades. For example, given Korean women’s high educational attainment and the increase in public opinion support for women’s life-time employment, women’s overall employment rate could potentially be much higher than the current level of 50.2 per cent.[5] Korean women’s economic activity by age group also remains sharply M-shaped, suggesting high drop-out during childbearing/childrearing period. In fact, it looks much more “traditional” even compared to other East and South East Asian countries, including Japan (Figure 2).
The persistence of gender inequality in Korea is also evident from the fact that 40.1 per cent of women workers were working in non-standard employment as compared to 28.7 per cent in standard employment in 2007, while 42.7 per cent and 23.1 per cent of male workers were standard and non-standard employees, respectively (KWDI, 2008; Table 1).[6] The extent of gender inequality is made even more clear by the Table 2, which shows that despite having nearly identical work hours, women’s wages are less than two third that of men, and their turnover rate is nearly 40 percent higher than men. Cho (1999) and Lee and Cho (2005) argue that the decline in women’s regular employment, immediately after 1997, is a result of employer practice of privileging and protecting male workers. Cho (1999) notes specifically a higher rate of involuntary unemployment among women as compared to men in 1998. Lee et. al.’s (2001) survey also found that the majority of employers continue to hold either gender stereotypic attitudes and/or aversion towards hiring women even after the end of the economic crisis. In sum, social and institutional changes in Korea have been incongruous: whereas some institutions have moved forward to adapt to the new social realities; other institutions have remained stubbornly “traditional”, unwilling to accept changes in family and gender relations.
2. Care Regime
The Korean care regime can probably be described as highly “familialistic” (Esping-Andersen, 1999: 45) and strongly male breadwinner (Lewis, 1992), in that the state oblige care responsibilities to the family (e.g. women) by providing almost no alternatives to family-based care. In Korea, wives, daughters and daughters-in-law have traditionally performed much of the care work within the family in an un-commodified form. Such gender division of labour was often rationalized by the idea of Confucian values that glorified the acts of filial piety and separate gender roles, and furthermore reinforced by social policies that assumed the family as the primary site of personal care. As a result, until very recently, very little or no care provision was available through the public or the private market sectors for either the elderly or children. This arrangement, however, has changed somewhat since 2000. While maintaining its basic familialistic focus, the state is taking a greater share of care responsibilities by financing and regulating elderly and childcare, delivered by for- and not-for-profit providers in the market, as well as through improvement of maternity and parental leave. In other words, Korea’s care regime is shifting from what may be considered as an extensive familialism to a modified familialism, and from strong to modified male breadwinner model through the partial commodification women’s care work by social care policies (Peng, 2009).[7] The following summarizes Korea’s current care regime using three indicators: time, services, and money.
- TIME
Care Leave
Since 2001, all women workers, including those who are in non-standard employment, are entitled to 60 days of fully paid maternity leave immediately after the childbirth with the right to return to the same job afterwards. This was extended to 90 day in 2006. The take up rate for maternity, though increasing, is still very low. While the number of women taking the leave increased from 22,711 in 2002 to 49,539 in 2006 (KWDI, 2008), only 31.2 per cent of all eligible women took the leave in 2004 (Kim, 2007). This can be attributed to the combination of employer pressure on women to quit after childbirth, and the pervasive societal norms on women to exit the labour market after childbirth. The Ministry of Gender Equality and Family also encourages fathers’ participation in childrearing through such programs as “no over-time on the 6th of every month” campaign and the “daddy quota” system within parental leave in 2006 (Choi, 2008). Unfortunately, the “daddy quota” within parental leave,, so far, only grants up to 3 days of non-transferable leave for fathers under the Equality Employment Act.
Following the 90 day maternity leave, parents can take 9 months of flexible parental leave (to make up to an equivalent of one year) with 500,000 won flat monthly allowance (approximately $500 USD) on full or part-time basis up to when the child reaches the age of 3. The parental leave provision is, however, limited to workers in regular employment, and hence a much lower take up rate compared to the maternity leave. In 2004 only 7.5 per cent of all working women took parental leave (Kim, 2007).[8] The ratio of fathers to mothers taking parental leave in Korea was less than 2 per cent in 2007 (OECD, 2008b).
Flexible Working for Reconciliation
The recent work and family reconciliation policies in Korea are increasingly focused on flexible and part-time employment. The 2007 revision of the Equal Employment legislation obliged employers to provide new parents with the right to claim part-time childcare leave with shorter working hours and flexible working hours, and to restrict overtime work. This is particularly important because Korean workers have the highest average hours actually worked per year amongst all the OECD countries, at 2,357 hours in 2006 as compared to the OECD and EU-15 averages of 1,777 and 1,625 hours, respectively (OECD, 2008). Both OECD and the Korean government consider long working hours as a contributing to Korea’s low fertility rate (Adema, 2008; Ministry of Labor, 2007). Employers are also encouraged through financial incentives and policy directives by the government to provide additional support, such as family and medical leave, childcare benefits and workplace childcare facilities (Korea International Labour Foundation, 2007; Ministry of Labor, 2007).
Despite recent policy changes, Korea is unique among the OECD in the low level of part-time employment. The incidence of part-time employment amongst temporary and permanent workers in Korea in 2005 was 14.0 per cent and 4.1 per cent, respectively (Grubb, Lee and Tergeist, 2007). Along with Turkey and Greece, Korea had one of the six lowest part-time employment rate in 2005 among OECD-31 nations (OECD, 2007). The total share of women’ part-time employment in Korea in 2005 was 12 per cent in 2005. This is considerably lower compared to countries like the Netherlands, Switzerland and Japan where shares of part-time employment among women were 60 per cent, 45 per cent, and 43 per cent, respectively, and to the OECD-31 average of 30 per cent (OECD, 2007). In sum, most Korean women either work full-time (on standard or temporary employment) or they drop out of the labour market.
B. SERVICES
In Korea institutionalized services in childcare and early childhood education is provided to children under 6-years old through either childcare centers or early child education (ECE) institutions. The public and private for- and not-for-profit childcare centres are subsidized by the government (see Peng, 2009), and they differ from ECE institutions in that their main purpose is “care”, not education. For children under 3, childcare services is extended primarily through childcare centers while for children between the ages of 3 to 6, institutionalized services are available either through childcare centers or ECE institutions, depending on families’ preferences. Childcare legislation falls under Ministry of Gender Equality and Family (MOGEF) jurisdiction, while ECE falls under Ministry of Education.
The total number of children enrolled in childcare centres in 2006 was 1,062,415, over 22-fold increase since 1990; while the total number of childcare centres was 29,823, an increase of over 15-fold from 1990(Ministry of Gender Equality and Family, 2007). The enrolment figures also show a rapid increase the proportions of preschool age children attending childcare facilities and kindergartens, from 21.5 and 14.8 per cent, respectively, in 2002 to 32.9 and 18.1 per cent, respectively, in 2006. In total, the per centage of public expenditure on childcare and ECE to GDP rose from 0.12 to 0.35 between 2002 and 2006. The expansion of state support for childcare is carried out through both public and private childcare centres. Most childcare centres are private, but a significant proportion of “private” childcare centres are run by not-for-profit organizations, such as religious groups, NGOs, and other registered non-profit corporations. Both public and private childcare centres are regulated by the Child Care Act. They are government inspected, and must pass government license to receive public subsidies. Childcare fees, for both private and public childcare centres, are regulated and standardized. Parents can choose either public or private childcare centre and pay pre-set childcare fee according to income levels. The government reimburses childcare centres for the cost of childcare on per capita basis. In sum, Korean government regulates and subsidizes childcare services provided by public and private childcare centres. Public support for ECEs is more limited as early child education is in Korea largely falls under the private sector. There are wide range of ECE services in the market for families wishing to provide extra early education for preschool age children, ranging from arts and sports focused education to English language focused playgroups for middle and higher income families.
There is a plan to institute a one-year free pre-school education for all 5-year olds by 2010 under the Second Scheme for National Childcare Support Policy in 2006. The enrolment rate of children under 3 years old in childcare centres in 2004 was 19.9 per cent, and the combined enrolment rate of children in childcare centres and pre-schools were 59.5 per cent, 66.4 per cent, and 88.7 per cent, for 3, 4, and 5 year-old, respectively (OECD, 2008d). The national government budgets for ECE rose from 356 billion won (0.3 per cent of total government expenditure) in 2002 to 886 billion won (0.6 per cent) in 2006, while that for childcare increased from 435 billion (0.4 per cent of total government expenditure) to 2,038 billion (1.4 per cent), respectively (Ministry of Budget and Planning, 2010). Korean government estimates a significant increase in children’s enrolment rate in childcare and ECE institutions over the next 15 years as a result of the public investment.