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Unstable Income and the Welfare State in Asia

Yen, Wei-Ting, Yen
http://orcid.org/0000-0002-4153-678X
http://rave.ohiolink.edu/etdc/view?acc_num=osu1533388469470047

Abstract Details

2018, Doctor of Philosophy, Ohio State University, Political Science.
Since the 1980s, Asia has witnessed constant social policy expansion. Newly democratized countries show resemblance in terms of the route of coverage expansion. Due to authoritarian legacies, these countries undertook reform by expanding the already-existing Bismarckian-style contributory programs, most of which feature insurance rather than redistributive goals. Public sector workers have already been protected under these programs, so coverage reform mainly targeted private sector workers to close the protection gap. However, de jure coverage reform does not lead to de facto coverage expansion on the ground. Huge gaps between institutional designs and praxis exist across countries. What explains the mismatch? The mismatch between de jure institutional design and de facto implementation is partially due to the non-compliance behavior, which is the focus of the dissertation. I argue that the social foundation for Bismarckian-style social security programs no longer exists in Asia. The key reason is that the inter-temporal feature between contribution and benefit embedded in the Bismarckian-style contributory programs does not work well with flexible labor market structures, limiting the number of citizens participating in such programs. More specifically, I argue that labor market flexibility is conducive to workers' new career profiles, which are characterized by unstable earning patterns. Unstable income truncates citizens' time horizons and acts as a disincentive for contributing to social programs in which benefits can only be realized in the long run. Under the theoretical framework, several observable implications and sub-arguments are derived. First, people with unstable income are, in general, less likely to think about retirement due to their truncated time horizon. Second, unstable income should make people not participate in Bismarckian-style social programs, even if they are mandated to do so. Third, income level moderates the impacts of income instability; the negative association between income instability and retirement preparation (or participation in Bismarckian-style social programs) is stronger as income increases. Fourth, income instability cuts across employment status --- the insider-outsider cleavage is not as divided as previous studies suggest --- which leads to low support for contributory social programs in general. To show the robustness of my argument, I test the observable implications in various democratizing Asian countries: South Korea, Indonesia, and Taiwan. With the broad empirical analyses across various contextual settings, I find that unstable earning pattern explains retirement preparation and the choice to contribute to social security programs. The effect is not homogeneous across individuals: it is contingent on a person's income level. Higher income earners are affected more by income volatility than are low-income earners. Moreover, the empirical results also lend support toward the non-dualist view of informality. After controlling for employment status, unstable income still has a considerable impact on retirement planning. The implication of my dissertation is that the Bismarckian contributory programs might not have sustainable social foundations due to the increasing labor market flexibility.
Sarah Brooks (Advisor)
Sara Watson (Committee Member)
Philipp Rehm (Committee Member)
Jan Pierskalla (Committee Member)
204 p.
Behavioral Sciences; Political Science
social insurance; social policy; contributory programs; developing countries; intertemporal choice; welfare states; income insecurity; income instability; income volatility; insider-outsider; labor informality; Asia; Taiwan; Indonesia; South Korea;

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Citations

  • Yen, Yen, W.-T. (2018). Unstable Income and the Welfare State in Asia [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1533388469470047

    APA Style (7th edition)

  • Yen, Yen, Wei-Ting. Unstable Income and the Welfare State in Asia. 2018. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1533388469470047.

    MLA Style (8th edition)

  • Yen, Yen, Wei-Ting. "Unstable Income and the Welfare State in Asia." Doctoral dissertation, Ohio State University, 2018. http://rave.ohiolink.edu/etdc/view?acc_num=osu1533388469470047

    Chicago Manual of Style (17th edition)

osu1533388469470047
529
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This open access ETD is published by The Ohio State University and OhioLINK.