The Impact of Employment Assistance Programs on Job Insecurity in South Korea

• Background and Purpose

Secure employment affects families’ economic well-being through secure income and employees’ overall life satisfaction through a sense of control. Therefore, welfare states have supported their people to have job or employment insecurity by helping them find a job and build employable skill or creating jobs in the formal sector. Korea also has expanded employment assistance programs mostly based on the Employment Insurance scheme, and their impact on the participants’ labor market outcome needs to be assessed. In this regard, this study aims to examine the short-term impact of participating in employee assistance programs on the likelihood of having a secure job.

• Methods

This study used data from Korea Welfare Panel Study (KOWEPS), nationally representative data collected annually. By pooling 14 and 15 waves of KOWEPS collected in 2019 and 2020, we analyzed if and to what extent employment assistance programs participation at wave 14 is associated with the likelihood of job insecurity at wave 15. As an analytical approach, we conducted logistic regression of the program participation on job insecurity, controlling for the previous job insecurity. Job insecurity was measured by asking employees whether their employment is likely to be ended by employers regardless of their willingness or not. The sample includes those who were employed at both 14 and 15 waves (N=1,736).

• Results

Among 1,736 employees in our sample, 30.9 percent answered their job was insecure at wave 15. Also, 15 percent of employees participated in any type of job assistance program, including job training, job placement services, career counseling, and/or working at specific jobs provided by the government. About 25 percent of insecure employees at wave 14 participated in the assistance programs in the same year, and among the program participants, 65.3 percent were insecure workers.

As a result of the logistic regression estimate, job assistance programs marginally reduces the likelihood of job insecurity (b = -0.45, p < .1). When employees participated in the programs, their odds of having an insecure job decreased 0.36 times (OR = 0.64), controlling for their previous job insecurity.

• Conclusions and Implications

This study indicates that employment assistance programs can help the participants have a job with security. As a secure job can be crucial for low-income families to get out of poverty through not only secure income but also the ability to plan for the future, welfare policy is required to support those with working ability and willingness to secure their employment. Job-related skill training, job placement services, and assistance with transportation and childcare for job seekers would be long-term help, preventing them from being unemployed and falling into poverty. As this study examines the short-term (one year) impact of the programs, further research is suggested to look at the longer-term relationship between the employment assistance programs and job insecurity.