Promoting Social Cohesion in Korea

Korea faces the challenge of reversing rising inequality while sustaining robust economic growth. Welltargetedincreases in Korea’s low level of social spending are needed to fill holes in the safety net,especially for the elderly. The development of social security depends on closing gaps in coverage, whichare due in part to labour market dualism. Dualism creates serious equity concerns, as non-regular workersface significantly lower wages, precarious jobs, less coverage by social security and less training. Acomprehensive approach is required to break down dualism, including reduced employment protection forregular workers, improved social insurance coverage for non-regular workers and expanded training ofnon-regular workers. Education reforms are also needed to promote inclusive growth, notably by:i) improving the access of low-income children to high-quality early childhood education and careii) reducing reliance on private tutoring, notably at hagwons and iii) expanding income-contingent loans totertiary students.