Economic crises and fiscal measures in South Korea: Asian Financial Crisis, Global Financial Crisis, and COVID-19

ABSTRACT

.

This study conducts a changes-in-changes analysis to identify the adverse effects of three economic crises and the countercyclical stabilisation effect of the welfare system in South Korea. First, the crises commonly delivered disproportionate effects and the economically vulnerable experienced more severe damages. Second, even though the welfare system has better mitigated negative impacts during the recent crises thanks to welfare expansion, it still provided limited coverage and insufficient benefits. Therefore, the Korean government introduced the Emergency Disaster Relief Funds as the first-ever one-off universal benefit, but it did not mitigate early damages and had temporary positive effects.

KEYWORDS:

• Asian Financial Crisis
• Global Financial Crisis
• COVID-19
• Asia
• South Korea

Note

This paper is considerably modified from the author’s Ph.D. thesis. The views are solely those of the author and do not necessarily represent those of author’s affiliated institutions.

Acknowledgements

I am especially grateful for the constructive suggestions of Climent Quintana-Domeque, Sonia Oreffice, Julian Jamison, Eleanor Jawon Choi, and the anonymous referees.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

The authors have no funding to report.

Notes on contributors

Taiwon Ha

Taiwon Ha is a director of the Ministry of Economy and Finance in Republic of Korea. He has experienced a wide range of professional experiences as a government officer, such as economic and fiscal policies. He completed PhD Economics, and has academic interests on poverty, anti-poverty welfare programme, COVID-19, and social mobility.