Social Welfare Systems in East Asia: A Comparative Analysis Including Private Welfare

Abstract

This paper is an overview of the social welfare systems of five East Asian countries, namely Japan, Korea, Taiwan, Hong Kong and Singapore. It analyses the overall costs of welfare as well as income distribution aspects, based on both aggregate data and a programme-by-programme review of their welfare states (presented in annex). Private welfare is introduced in the analysis in two ways. First, it is argued that sometimes welfare programmes are characterised by a mix of public and private interventions, along the three dimensions of provision, finance and decision. Second, this study explores the welfare roles played by private actors alone, namely enterprises and families. The main conclusions are that (I) that Hong Kong and Singapore's public welfare expenditures will remain very low as long as they continue to rely mainly upon privately financed welfare programmes; (ii) Korea and Taiwan's public welfare expenditures will grow significantly in the coming years as their populations age, their old age pension programmes mature and their various insurance schemes are extended to marginal occupational groups; (iii) Japan's ageing problem is compounded by the weakening of the family as a provider of welfare, which will put an extra burden on her welfare state; (iv) Japan and Korea's enterprises are challenged in their chief welfare role, namely securing employment, which will also put an extra burden on their welfare states, and (v) the main income equalising factor in East Asia is the very equal distribution of work across households, which is also threatened by the weakening of enterprise and family welfare (i.e. respectively rising unemployment and decreasing income pooling inside the family).