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Economic Crisis, Democratization, and Welfare State Generosity in South Korea, 1972-2005: Evidence from Structural Break Estimation

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한국사회과학협의회 (Korean Social Science Research Council)|2012.12|Korean Social Science Journal|제39권 제2호|pp. 55-78

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참고문헌

키워드

democracyeconomic crisisdemocratizationstructural breakswelfare policy
주제분류사회과학일반

초록

In this article, I examine the effects of economic crisis and democratization on welfare state generosity in South Korea. While there are many qualitative studies documenting welfare policy expansion after the 1997 Asian financial crisis or the 1987 democratization, statistically solid empirical research remains lacking. This study fills the gap by employing several time-series methods for testing for structural breaks. Using 1972-2005 data, I show that the two economic crises, one in 1979 and the other in 1997, play major roles in explaining the growth of the Korean welfare state. This result is consistent with the hypothesis that economic crisis leads the public to ask the government for protection. I also show that democratization led to an increase in the expenditure on welfare programs, but its effect is statistically not robust.

Abstract

In this article, I examine the effects of economic crisis and democratization on welfare state generosity in South Korea. While there are many qualitative studies documenting welfare policy expansion after the 1997 Asian financial crisis or the 1987 democratization, statistically solid empirical research remains lacking. This study fills the gap by employing several time-series methods for testing for structural breaks. Using 1972-2005 data, I show that the two economic crises, one in 1979 and the other in 1997, play major roles in explaining the growth of the Korean welfare state. This result is consistent with the hypothesis that economic crisis leads the public to ask the government for protection. I also show that democratization led to an increase in the expenditure on welfare programs, but its effect is statistically not robust.

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