Welfare Budget Grows Rapidly, but Direction Lacking... Need to Strengthen Unemployment Transition and Caregiving Funds

Welfare Spending at 15.2% of GDP

Still Below OECD Average of 22.1%

Weak Support for Family, Caregiving, and Unemployment Transition

While South Korea's welfare expenditure still falls short of the levels seen in the Organisation for Economic Co-operation and Development (OECD), recent data shows that the country is quickly closing the gap. However, analysis indicates that welfare budget spending remains heavily concentrated on healthcare and old age, leaving South Korea less prepared to address social risks such as family needs, caregiving, and periods of unemployment transition.

According to the report "Korea's Welfare Expenditure in International Comparison" released by the National Assembly Budget Office on March 14, 2026, South Korea's public social welfare expenditure in 2021 amounted to 15.2% of its gross domestic product (GDP). In comparison, the OECD average for the same statistic was 22.1%, confirming that South Korea's welfare level still lags behind that of the OECD member states.

Nevertheless, from 2011 to 2021, South Korea's average annual increase in the social welfare budget was 12.2%, more than double the OECD average of 5.7%. The upward trend has continued even after 2021. Welfare expenditure, which stood at 199.7 trillion won in 2021, is projected to reach 269.1 trillion won in 2026, reflecting an average annual growth rate of 6.15%.

Source: National Assembly Budget Office

The National Assembly Budget Office categorized social welfare expenditure using the OECD's Social Expenditure Database (SOCX) into areas such as healthcare (ensuring access to medical services and supporting medical expenses), old age (income maintenance and living support for the elderly), family (support for child-rearing and compensation for childbirth and childcare costs), unemployment (income replacement and living stability during involuntary unemployment), incapacity (income support for those unable to work due to illness, disability, or work-related injury), active labor market (active support for the entry and re-entry of vulnerable groups into the labor market), housing (alleviating housing costs and ensuring adequate housing for low-income and vulnerable groups), survivors (securing livelihood for surviving family members after the death of a breadwinner), and other social policies (comprehensive support for other socially vulnerable groups). By detailed category, spending was largest on healthcare (113 trillion won), followed by old age (74.6 trillion won), and family (34.3 trillion won).

The National Assembly Budget Office stated, "South Korea's public social welfare expenditure is relatively concentrated in the fields of healthcare and old age, and the functions of prevention and response to life transitions are not sufficiently developed." It further assessed that "in areas such as family and caregiving, unemployment transition, and incapacity, institutional responses have not kept pace with the growing scope of social risks." The report went on to recommend, "In future fiscal management, it is necessary to move beyond simply expanding the total expenditure and consider restructuring and introducing new systems focused on areas where there are domestic institutional gaps. In particular, areas such as sickness, unemployment transition, family, children, and caregiving should be prioritized for review, considering the frequency of risk occurrence and their social impact."

This content was produced with the assistance of AI translation services.