In view of the characteristics of the Korean labour market as well as work cultures and work practices, the implementation of an effective system of social protection for sick workers is essential for Korea.
First, job quality is a major concern in Korea, with important compromising effects on worker health. Almost one in six full-time workers earns low wages (below two-thirds of gross median earnings). Although the proportion of low-wage workers has decreased substantially, it is still higher than the OECD average. More than one in ten workers works very long hours (60 hours or more per week), which is double the OECD average. Long working hours increase the risk of work accidents and negatively affect worker health, by increasing stress and fatigue while reducing the time available for recovery (OECD, 2020[2]; Hijzen and Thewissen, 2020[51]).
Second, Korea has important social protection gaps, which fuel labour market insecurity and work stress. By providing income replacement, social protection reduces the risk of falling into poverty when losing a job or leaving the labour market. A broad evidence base shows that labour market insecurity negatively affects health, by causing stress, sleep disturbance, lower job satisfaction and gloomier expectations about the future (OECD, 2022). Korea’s social protection system has important gaps and is not overly generous. Redistribution through taxes and benefits is weaker in Korea than in most OECD countries. Social protection is particularly weak for the large group of non-regular workers, who are over-represented in small companies with less than five employees and among older and low-educated workers and women (Table 3.1). Although important advancements have been made, there are still significant coverage gaps in Employment Insurance, Health Insurance and Pension Insurance. Income replacement rates are also relatively low, for both pension insurance (partly because of a still immature National Pension Scheme) and employment insurance (because of a gradual shift to de-facto flat-rate payments).