SEOUL, Oct. 31 (Korea Bizwire) – Government expenditures on welfare are increasing year after year, but a recent report showed that Korea still falls far behind its OECD counterparts.
According to the OECD’s October update to its Social Expenditure Database, Korea’s social spending was marked at 10.4 percent of its GDP, ranking 34th among 35 OECD member nations. Following Korea was Mexico at 7.5 percent.
The metric for social spending was derived by totaling nine expenditure categories, including old age, family, and unemployment. A higher percentage expenditure relative to GDP usually implies a well-established national social security system.
The percentage did increase for South Korea, however. The number, which stood at 2.7 percent in 1990, nearly doubled to 4.5 percent in 2000, and to 8.3 percent in 2010 and 9.7 percent in 2014. And for the first time in history, it surpassed the 10-percent mark in 2015 at 10.1 percent.
The trend is expected to continue in the future, with the government dedicating a record 130 trillion won ($113.6 billion), or 32.4 percent of its annual budget, to social spending in 2017.
Nonetheless, the current value is a mere half of the OECD average of 21 percent, and behind developing countries like Chile (11.2 percent), Turkey (13.5 percent), and Latvia (14.5 percent). Cash benefits, such as old age pension and parental leave wages, were particularly low at 3.9 percent of GDP, also coming at 34th.
Meanwhile, France topped the list, devoting nearly one third (31.5 percent) of its GDP in welfare. It was followed by Finland (30.8 percent), Belgium (29 percent), Italy (28.9 percent), and Denmark (28.7 percent).
The U.S., with the highest GDP among OECD nations, spent 19.3 percent in welfare, while Korea’s neighbor to the east, Japan, ranked 13th at 21 percent.
By Lina Jang (firstname.lastname@example.org)