KWDI Korean Women’s Development Institute

Korean society has experienced deterioration of GINI coefficient, which shows problems in income distribution. Women, particularly women household heads, face high risk of poverty during their life course. Korean government has been more interested in poverty of elderly than it of working age groups.

Workfare drives poverty reduction through active labor market policies. Korean government has adopted workfare since early 2000, and focused labor market policies for low income families and individuals. Workfare generated new issues regarding labor market conditions. Even though government provided active labor market policies to people who needed employment, labor demand did not respond to those policies. Women as vulnerable group in labor market experienced hardship to be employed, and they were still poor even though they were employed. Due to women’s occupational segregation, women’s working condition was even lower than men’s among other low income groups. Another important issue regarding workfare is it has to focus individuals rather than households. Previous studies have focused on women households as the unit of measuring poverty. Workfare broadens the scope of policies to individual labor market performances as well as households income distributions. Even though gender is one of the critical factor to explain employment and poverty, studies dealing with women’s poverty in labor market perspectives are rare. The purpose of this study is to show current status of women’s working poverty, and make policy implications to alleviate poverty. Research questions include 1) how women’s poverty has worsen compared to men’s? 2) what are the relationship between economic participation and poverty for women?, 3) government workfare worked effectively for women’s poverty reduction? 4) what are the characteristics of poverty for the young and the middle age groups?

In order to answer the questions, we utilized the data, named “KoWePs(Korea Welfare Panel Study)”, collected by Korea Institute of Health and Social Affairs(KIHASA) and Seoul National University. KoWePs accumulated 5th wave of panel study and data covers from 2005 to 2009. It includes over sampled observations of low income households and individuals, thus is appropriate for this study.

Major findings show that women’s poverty has been increased compared to men’s even their working ages. More the work, less the poor in general. However, since the poor’s labor market status was not stable, their wages were very low and their occupations and employment status were not good enough to exit from poverty.

Government program for workfare was very effective to women. Difference in Difference estimation showed women were more likely to get a job after they received government programs. However, the pathways to poverty reduction from employment were not clearly recognized from the results. More targeted policy intervention was needed to strengthen the effects of programs.

Government welfare programs was not provided for the poverty of young generation. We separated working age groups into two groups. One is the younger working groups aged from 15 to 34. The other is middle groups, aged from 35 to 54. Their poverty characteristics were different in terms of economic activity and vulnerability. For the young poor groups, government needs to provide active programs to support school to work transitions. Especially college education specialized to training is very crucial for preventing their poverty takeover from their families. For middle aged low income women, active labor market policies and powerful case management have to be provided. Labor market discrimination and hardship of work and family reconciliations were the major obstacles. Since women were willing to work, providing programs and case management will be very cost effective to relieve women’s poverty level.