Empirical Analysis of Fiscal Soundness and Public Social Expenditure: A Lesson for the Future Direction of the Korean Welfare State

The aim of this paper is to investigate the relations between fiscal soundness and public social expenditure in advanced welfare states so as to reconsider the conventional wisdom that welfare expenditure aggravates national finances. Through this, I propose the clues of building the sustainable Korean welfare state. I focus on the interdependent relationship between fiscal soundness and public social expenditure based on fiscal sociology. Considering this interaction, I form two sets of simultaneous equations models and employ a special statistical method, three‐stage least squares (3SLS). The results regarding the causal relationship between fiscal soundness and public social spending indicate that, if public welfare spending is increased, fiscal health is damaged. However, as many comparative social policy researchers have pointed out, outcomes of welfare states differ from country to country according to the composition of public welfare spending. Specifically, some welfare states with priority given to social services such as vocational training or childcare services have maintained the stability of public finance. By extension, we can say that public social expenditures have a positive influence on fiscal soundness based on the composition of social expenditures. Finally, it is possible to create financially sustainable welfare states.     

Social investment,social service and the economic performance of welfare states

This article begins with an examination of the role of social services as the key instrument of social investment strategy, presenting an empirical analysis of its impact on economic performance. A pooled time series, cross‐section analysis was conducted with the data of 15 welfare states from 1990 to 2007 under the ‘social investment hypothesis’ that more social service orientedness brings about a greater positive effect on the economy. The results show that a larger share of social service spending in the total social expenditure – more social service orientedness – contributes to economic growth and labour market performance, whereas a larger aggregate size of the welfare state may have a negative effect on employment. In conclusion, this study suggests that the relatively ambiguous welfare strategy of social investment could be clarified as a ‘transition from income security to livelihood security’ in which emphasis is placed on social service. Key Practitioner Message: ● This study suggests that the key instrument of social investment strategy is social service; ● The results show that more social service orientedness contributes to economic growth and labour market performance.     

Social Policy in Greece: Rhetoric versus Reform

This paper reviews the major social policy developments in Greece during the 1980s and 1990s, focusing on social security, health and employment policies. It argues that the concept of social policy and the practice of politics have been distorted in this country. Social policy reflects the legacy of a heavily politicized and centralized policy‐making system, an impoverished administrative infrastructure and poorly developed social services. Its emergence is characterized by the pursuit of late and ineffective policies. It lacks continuity, planning and coordination, being oriented towards short‐term political expediency. It is largely insurance‐based, reproducing huge inequalities and institutional arrangements which are behind the times. It provides mainly cash benefits, low‐quality but rather expensive health services and marginal social welfare protection. Moreover, the lack of a minimum income safety net confirms the country's weak culture of universalism and social citizenship. By implication, complex policy and interlocking interest linkages have tarnished the “system” with a reputation for strong resistance to progressive change. At the same time, sources of change such as globalization, demographic developments, new household and family/gender patterns, unstable economic growth, fiscal imperatives, programme maturation, as well as persisting unemployment, changing labour markets and rising health care costs, have produced mounting pressures for welfare reform.     

Crowding Out or Welfare Promotion? How Foreign Aid Affects Social Expenditures in Latin American Welfare Systems

Foreign assistance constitutes a significant share of government revenue in many low‐ and middle‐income economies and is targeted at poverty reduction and the promotion of social and economic well‐being. This study therefore examines fiscal responses by Latin American welfare states to the inflow of such aid. As a form of external non‐tax revenue, aid can function as a substitution for public welfare expenditure, with a crowding out effect being the likely outcome. This article investigates whether overall aid and aid that is particularly targeted at the social sector substitutes public welfare provision and, if so, whether it also substitutes its function. A time‐series cross‐section analysis of 19 Latin American countries for the period 1980–2008 provides limited support for the assumption that foreign aid payments influence the welfare budget. It is only the health care sector in middle‐income countries which experiences a small decrease in expenditures. Social security and education expenditures are not affected.     

我国人口老龄化背景下养老产业发展问题研究

在新经济常态背景下,随着人口老龄化程度不断加深,我国财政支出将面临越来越大的挑战,发展养老产业将成为我国应对人口老龄化问题的必然选择。养老产业的发展有利于减轻政府负担,提高老年人生活质量,促进产业调整,缓解就业压力。我国的养老市场规模庞大,并且供不应求,政府高度关注养老产业,为我国大力发展养老产业提供了可行性。但是,尽管目前"保险系""央企系""房企系"等社会资本已经注入,养老产业仍然存在着政府的引导和支持力度不足,缺乏专业人才,相关产业整合难度大,国民养老观念落后等问题。因此,我国应尽快完善相关政策以加强引导和扶持的力度,积极调动社会资源使投资主体多元化,加强养老产业人才队伍建设,加快转变养老观念。     

Social Welfare Reform Since the 1997 Economic Crisis in Korea: Achievement, Limits, and Future Prospects

Social welfare reform has been implemented in Korea since the 1997 financial crisis. A dominant concern of the reform was on equality and social solidarity. A major means to this end was establishing universalistic social insurance programs like those in developed welfare states. The reform efforts produced some positive results but were not greatly successful. Income polarization and the deteriorating economic status of low-income families have become big social issues. Many low-income families have not gained many benefits from the reformed social security system. The rapid aging of the population is creating an exploding demand for social spending, risking the fiscal sustainability of major social insurance programs. The reform experience suggests that a social welfare system based on western-style universal social insurance may be too expensive to sustain and not very effective in protecting disadvantaged families in Korea. More attention is being paid to expenditure control and efficiency. Social insurance programs may need to be leaner than those in traditional welfare states. Targeted programs, such as the "making work pay" policy, are likely to be expanded more broadly to low-income families. The future of the Korean welfare state may hinge on successful employment support for working families and extensive investment in their human capital.     

北京市失业保险金支出与公共就业服务联动机制研究

本文以北京市失业保险金在公共就业服务上的支出为主题,以失业人员为主要调查对象,对失业保险金促进就业的作用及公共就业服务效果进行深入调研,客观分析与评价了北京市失业保险金在公共就业服务上的支出效果,旨在找出该过程中存在的问题,并提出有针对性的对策和建议。     

Welfare Rigidity,the Composition of Public Expenditure and the Welfare Trap

Welfare expenditure is characterized by rigidity, i.e., it goes up easily but is very hard to get down. We introduced welfare rigidity into an endogenous growth model that includes government expenditure to analyze the impact of welfare rigidity and the composition of public expenditure on economic growth and family utility. Our findings show that welfare spending and economic growth have a non-monotonic relationship that is negative or inverted U-shaped depending on cross-country differences. Higher welfare rigidity reduces long-term economic growth and household utility. According to the estimated optimal size of welfare expenditure, China, as a developing country with a large population, has to do all it can to improve people’s livelihood but must at the same time weigh its limited resources so that its welfare expenditure does not fall into a “welfare trap.”     

Employment status transitions among young adults,with and without disability

Employment is a crucial avenue through which young people with disability can experience material wellbeing and social participation. While the low employment rates of young people with disability are well established, little is known about the stability of employment status – that is, the degree to which individuals remain in or move in and out of employment. This article uses longitudinal data from a large Australian national data set to investigate the transitions between full‐time, part‐time and non‐employment for young people with and without disability. Considerable mobility was found between employment states for both young people with and without disability, with young people with disability more likely than their peers without disability to transition to reduced levels of employment and less likely to transition to increased levels of employment. Social background and contextual factors predicted employment for young people with disability; however, disability represented an additional penalty even after taking these factors into account. Findings suggest a need for social policy targeted specifically towards the barriers to maintaining and increasing employment experienced by young people with disability.     

就业市场中间人行为分析:基于社会资本视角

本文基于中国综合社会调查数据（CGSS）对劳动力市场上中间人行为进行分析，具体考察影响其分享就业信息、提供就业帮助和最终成功匹配的因素。研究表明，就业信息的分享体现了社会资本的“运作效用论”而非“地位效用论”。社会地位和教育水平较高的中间人并不热衷于信息分享，而就业帮助体现了趋异性交往原则。中间人倾向于向教育水平低于自己的求职者提供实质性的就业帮助。此外，间接关系比单一的强关系或弱关系更能预测人情资源。教育水平较低和有迫切就业需求的劳动者对社会资本依赖较大。与女性相比，男性更依赖关系渠道。企业设立固定金额的推荐奖金可促进员工分享就业信息概率，但不影响成功匹配的概率。     

Social Justice and the Reform of Social Security

There have been massive increases over the years in expenditure on the public services loosely grouped together as the “welfare state”, but widespread dissatisfaction persists. This article is a critique of the proposals for reform presented in the Report of the Commission on Social Justice, set up by the late John Smith. The report contains a sweeping condemnation of existing arrangements and puts forward a series of recommendations ranging from the health service to decentralization in government and from employment policy to benefits for the elderly. As was perhaps inevitable, some are more precisely presented than others. An important example of the more fully specified proposals is one to establish what would, in effect, be a means-tested “pension guarantee”but with “means”so defined as to exclude capital and with much improved “disregards”. Another is the endorsement of the proposals to extend social insurance to part-time workers—a proposal which raises some controversial issues. There is much in this report that deserves close attention, and it is, therefore, all the more unfortunate that its proposals are not presented in the form of a quantified plan for social policy. Even for the first five years or so of the fifteen the Commission has in mind, there is no attempt at quantification. The importance of economic growth is rightly stressed, but “faster growth”can become a panacea that obscures the need for choice, not only between private and public expenditure but also between the various components of public policy itself.     

The Ageing of Australia: Fiscal Sustainability,Intergenerational Equity and Inter‐temporal Fiscal Balance

Australian public policy makers are presently confronted with significant demographic changes that will profoundly affect the formulation of rational economic and social policy over the long term. This paper seeks to outline the potential impact of this demographic change and place it in historical perspective. The challenges posed by an ageing population for fiscal policy are explored and it is stressed that policy inertia will invite severe costs in future. It is argued that an appropriate policy stance should be developed in the context of a framework for inter‐temporal fiscal balance not only to focus on long‐run fiscal sustainability, but also to include considerations of intergenerational equity.     

Determinants of Social Expenditure in Sri Lanka

The study examines the determinants of social expenditure in Sri Lanka for the period 1970–2010. The data are from a new data set assembled by the authors. The social spending data are collected from the Central Bank of Sri Lanka on education, health, and also on welfare spending. The study explains the determinants of social spending considering the demand‐side and the supply‐side driving forces and finds that inequality issues have been a major concern of social policy in Sri Lanka. Similarly, this study implies the influence of political behavior to satisfy voters as explained by the fiscal illusion theory. The globalization is not significant for social expenditure as commonly assumed in developed countries. Even the consequences of the self‐interested behavior of bureaucrats are not evident in the Sri Lankan welfare sector.     

Public investment in care services in Turkey: Promoting employment & gender inclusive growth

Recent policy debates on macroeconomic tools to counteract the prolonged global economic recession point to the potential of fiscal policies with appropriate sectoral targets for simultaneously boosting effective demand while alleviating inequalities through employment generation. This paper contributes to the debate by pointing to the social care services sector –in particular early childhood education and care (ECEC) — as an effective target of fiscal spending for robust employment generation and gender inclusive growth. We use a macro-micro simulation model to examine the aggregate and gender employment impact of increasing public expenditures on ECEC services, an underdeveloped sector in Turkey versus physical infrastructure and construction, a common target of stimulatory spending. Our methodological approach combines input-output analysis on aggregate employment effects with a statistical microsimulation approach to assess distributional outcomes. We find that an expansion of ECEC services creates not only significantly more jobs but also does so in a more gender-equitable and fiscally sustainable way than the a construction boom.     

Internalizing the public cost of obesity in Spain: Distributional effects on nutrient intake

Studies dealing with obesity have confronted it either from the fiscal policy or from economic cost perspective. There is the need to target fiscal policy goals at the economic cost that obesity imposes on society instead of simulating arbitrary taxes schemes. This paper analyzes the effectiveness of imposing a revenue-neutral fat tax in Spain addressed to internalize the public health expenditure associated to obesity. Results suggest that this tax policy led to an improvement in the diet quality, and decreased the consumption of saturated fatty acid, sodium, and cholesterol. From the welfare perspective, the tax is regressive across all household segments.     

The Fiscal Crisis of National Health Insurance in the Republic of Korea: In Search of a New Paradigm

In 2001, National Health Insurance (NHI) in Korea, the social insurance system for health care with universal population coverage, experienced a serious fiscal crisis as its accumulated surplus was depleted. This fiscal crisis is attributed to its chronic imbalance: health care expenditure has increased more rapidly than have insurance contributions. The recent failure in implementing pharmaceutical reform was a further blow to the deteriorating fiscal status of the NHI. Although the NHI has since recovered from the immediate fiscal crisis, this has mainly been because of a temporary increase in government subsidy into the NHI. The strong influence of the medical profession in health policy‐making remains a major barrier to the introduction of policy changes, such as a reform of the payment system to strengthen the fiscal foundations of the NHI. Korea also has to restructure its national health insurance in an era of very rapid population ageing. A new paradigm is called for in the governance of the NHI: to empower groups of consumers and payers in the policy and major decision‐making process of the NHI. The fiscal crisis in Korean national health insurance sheds light on the vulnerability of the social health insurance system to financial instability, the crucial role of provider payment schemes in health cost containment, the importance of governance in health policy, and the unintended burdens of health care reform on health care financing systems.     

宏观税负、公共支出结构与个人主观幸福感 ——兼论“政府转型”

本文利用CGSS2006数据库,对政府转型下的宏观税负、民生财政支出和地区收入差距等与个人主观幸福感的关系进行实证检验后发现：（1）宏观税负对居民主观幸福感有显著负影响;（2）总体而言,政府公共支出增进了居民的主观幸福感;（3）从公共支出结构看,地方政府基建投资对于城镇居民的主观幸福感有显著负效应,政府用于科教文卫和社会保障的支出对居民的主观幸福感有显著正效应;（4）科教文卫支出与社会保障支出对市民与外来人员幸福感的影响存在显著差异。     

Cash‐for‐care policy in Sweden: An appraisal of its consequences on female employment

In 2008, Sweden introduced a cash‐for‐care benefit consisting of a flat‐rate sum paid by municipalities to parents whose children were between the ages of one and three and who did not use publicly subsidised childcare. The main object of the reform was to increase parents’ ‘freedom to choose’, but the policy was criticised because of its potentially negative effects on gender equality and mothers’ employment. This study focuses on the effects of cash‐for‐care on female employment in Sweden. The study shows that the adoption of this policy had negative effects on female employment, although primarily in rural areas. Cash‐for‐care was abolished in Sweden in 2016. To evaluate the effects that the policy had on female employment during the time it was in place is important as it indicates what may happen if the policy is introduced again.     

Social Policy between Plan and Market: Xiagang (Off-duty Employment) and the Policy of the Re-employment Service Centres in China

China's gradual transition from a command economy to a market system has been vexed by its ailing state‐owned enterprises (SOEs) employing huge numbers of surplus workers. Under the growing challenge of market competition, the survival of SOEs depends critically on the release of unwanted staff. If not handled well, however, massive layoffs could trigger ugly protests, erode social stability and challenge the governing mandate of the Chinese Communist Party. Facing this dilemma, the state's response has been to invent a process of ‘xiagang’ (off‐duty employment) whereby redundant state workers can leave the production process without causing social turbulence, and to introduce a national programme of re‐employment service centres (RSCs) which offer living allowances, social security, job training and re‐employment assistance as a transitional measure. As a distinct form of unemployment, xiagang reflects the special challenge confronting the state and civil society in a critical stage of China's market transition. This article sets out to explore the political and social meanings of xiagang and the RSCs to elucidate how the state uses a specific social policy to balance both group and national interests and to steer the country on to the next stage of market development.     

Impacts of privatization: Use of multimodal survey

Given current local government fiscal stress, the privatization of public services has been considered as a way to balance local government budgets and improve community service efficiencies. However, along with economic efficiency, the social efficiency of the privatization should be considered. Social efficiency not only incorporates economic efficiency but also includes accountability and equity. In this study, the economic and social impact of the potential privatization of a local utility (Churchill County Communications) is estimated. A web-based questionnaire was employed to collect data quickly and efficiently from CC Communication's employees and employ the questionnaire results in the analysis. Using and augmented input–output model of Churchill County, the analysis showed that privatization would reduce Churchill County employment by 279 jobs and reduce county household income by $36.171 million. In addition, the county could lose up to 14,735 hr of volunteer time and $85,233 in charitable donations if CC Communications were privatized.