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A Comparative Analysis of Extended Unemployment Benefits between Korea and the USA and Its Policy Implications

Kim, Dong-Heon 1 Jai-Joon Hur 2

1동국대학교
2한국노동연구원

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ABSTRACT

In this paper we compare extended unemployment benefits programs between Korea and the USA with a comparative perspective and, based on the comparative analysis, suggest institutional reform of Korea's extended unemployment benefits in the employment insurance system. Although Korea and the USA have similar unemployment benefits systems, institutional arrangements of extended unemployment benefits are much more generous in the USA than in Korea. Based on the U.S. empirical studies and policy experiences of extended unemployment benefits, we suggest the extended benefit amount should be the same as the regular benefit amount to support the livelihood of the long-term unemployed. Our study shows that Korea's exhaustion rates are much higher than those of the USA. This implies that it is imperative to review general adequacy of regular benefit duration and the duration of extended benefits.Current triggers used to activate extended benefits need some fine-tuning in the near future to adapt to the changing labor market situations. Finally we argue that extended benefits should be financed by the general tax or at least 50 percent of the expenditure costs shared by the government.

Citation status

* References for papers published after 2023 are currently being built.