Abstract

Since the economic crisis late 1990’s, the inequality between large corporations and small ones has been widening in terms of corporate income and employee wage. This weakening of small firms has shrunken their R&D investment, hurting their competitiveness. On the other hand, large corporation have enjoyed lucrative profits, putting aside a huge cash in reserve.

This study analyzes excess profit sharing or performance benefit sharing to address this exacerbating inequality. Currently, there is no legal framework on which public entities can employ excess profit sharing even if they want. Instead, they take performance benefit sharing, and thus help small firms to strengthen R&D capability and gives additional cashes in aid if they satisfy the service standard that large corporation lay out. This cash subsidy can lead to wage increase for employees in small firms, partly narrowing wage gap between large and small corporations.

This study present how public entities that have not yet performance benefit due to lack of the appropriate legal clause use it to help small firms and seek for flourishing together.

 

Contents

01 Introduction

1_Background and Purpose of the Study

2_Main Contents and Research Methods

 

02 Public Welfare Expenditures and Prospect of Changes in Korea

1_Current Public Welfare Expenditures

2_Changes of Welfare Demands

3_Condition of Public Finances

 

03 Preceding Experiences of Advanced Welfare States

1_Social Policy Paradigm Changes

2_Review of Social Investment Strategies

3_Trends of Welfare Reforms

 

04 Policy Directions for a Sustainable Welfare State

1_Socio-economic Performances by the Type of Welfare State

2_Reasonable Level of Public Welfare Expenditures and Tax Revenues

3_Restructuring Welfare Policy Compositions

 

05 Policy Agendas for the Seoul Metropolitan Government

1_Review of Public Welfare Expenditures in Seoul

2_Strategies to Maintain the Sustainable Welfare System