IDB: Transformation: Skills for Productivity, in Chile

Financing Model for Training in Korea

Jisun Chung (June 5, 2014) Korea Research Institute for Vocational Education and Training 1

Educational System of Korea

Age School Year 24 22 18 15 18 16 12 9 VET Sector MOE MOEL (EI) VT VE University Junior College KUT High School Vocational HS Polytechnics VTIs Middle School 12 6 Compulsory Education Elementary School

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Trajectory of Educational Expansion 90 70 50 30 10 -10 •  Step-by-step attainment of universal education: primary → secondary → higher (tertiary) education

Trow, “Forms and Phases of Higher Education”: Elite(<15%) → Mass(15-50) → Universal(>70%) Elite Mass Universal

1970 1975

Primary

1980 1990

Lower Secondary

1995 2000 2003

Upper Secondary

2010 2012

Tertiary

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Vocational Training and Ministry of Labor

 Vocational Training Act (1967)  Act on Special Measures for Vocational Training (1976) 

Employment Insurance Act (1995)

 Vocational Training Promotion Act (1999) 

Employment Insurance Scheme

under the authority of the Ministry of Employment and Labor (MOEL)  Three pillars: 1) Job Skills Development Program 2) Employment Stabilization Program 3) Unemployment Benefits 4

Number of Trainees who underwent Vocational Training during 2 nd (1967~1971) to 7 th (1992~1996) National Economic Development Plans

total

10

In-plant training

5

•

Number of Participants in Training

- 15 -

26000 ($) 24000

Changes in GDP per Capita since 1960s

26,204 21,529 22000 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 ‘ 60 105 ‘ 65 ‘ 70 ‘ 75 ‘ 80 ‘ 85 ‘ 90 11,471 ‘ 95 ‘ 00 ‘ 05 ‘ 10 ‘11 ‘13 ‘14  1965-1995: 100-times increase in GDP per capita only in 30 years. Drastic development as shown in the graph 7

Classification of the Korean VTIs

Classification Public VTIs Total Sub-Total Public Org.

Local Govern.

Min. of Justice Private VTIs Sub-Total Trg. Corporation WRD Center

Women Resources Development

MOEL Designated Others No.

VTIs/Remarks 2,777 79 40 8 31 KOPO, KUT, KEPAD

(Korea Employment Promotion Agency for the Disabled)

Seoul, Other Provinces Inmates ’ Vocational Competency 2,698 55 51 Non-profit Corporations Women ’ s Vocational Competency 823 1,769 Individual Designated VTIs, KCCI (

Korea Chamber of Commerce and Industry)

Companies or Associations, etc.

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Polytechnics in Korea

• • The KOPO , head quarter of Korea Polytechnics, was separated from HRD Korea that established by MOL, in 1998.

The KOPO is the biggest VT institution in Korea and trains about 20,000 technicians a year and over 85% of graduates are employed at enterprises.

College Graduates High School Graduates Craftsman Residents

enter

Polytechnics

2years graduate 2years Bachelor Deg Associate Deg 1 ~ 2years No Degree 1month ~ 1year

[Training Courses]

No Degree

Engineer Technician Master Craftsman Craftsman

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Present Status of KOPO

• • Short-term Training Courses : Up-grade, Residents, Inferior, Women, etc Most of Training Dep’t concentrated on Technology Field. 10

Textile-Fashion Campus Korea Polytechnics Seoul-Jeongsu Campus Korea Polytechnics

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Response of

223 companies Needs of industries for Education 87 75 72 70 68 Practice Field training creativity Curriculum meeting needs Teaching method Experience of staffs 12

Industry & Academia Cooperation

• Companies pay high cost for reeducation of new employees – 20 months, 55,000 US dollars per new employee • To minimize this reeducation cost, companies cooperate for college education - development of curriculum and textbook together, lecture, seminar, field training, internship 13

Polytechnic Colleges Policy

• • • • Specialized Training Policies FL System – Factory Based Learning : Same Training Circumstance as Factory – Training Curriculum based on Job/task Analysis

Extension of Convergence Technology

– Technology combined with other Technology or Human Studies

Strong Relationship with Companies

– Various Affairs based on School-Industry Cooperation – – One Professor connected with Ten Companies Company centered Customized Training 14

Employment Insurance

as financial support mechanism for Training

☞

Employment Insurance

(funding project) was introduced in 1995 by the Ministry of Employment and Labor as a social safety net.

• The EI is a comprehensive labor market policy and a social security system including employment security and vocational skills development programs - aimed at preventing unemployment and promoting employment as well as a traditional unemployment insurance program providing unemployment benefits.

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Levy-Grant System

• Every company is obligated to pay the imposed training fees o f the employees, and the government pay back when the traini ng implemented.

• Employer, employees and the unemployed are free to provide or receive vocational training, and the EIS Fund grants subsidi es for the training implemented.

• More favorable for large enterprises; The return rates is flexible for the SMEs which are vulnerable in terms of conditions to implement training.

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Employment Insurance for all workers

 Support for skills development of the employers, employed, job seeker, self-employed  Coverage: All Workplaces - Since October 1998, all workplaces with one or more employee have been subject to the Employment Insurance System.  Companies implement training for the employees autonomously, government induces and encourages the companies to develop human resources needed by supporting financially. 17

Annual Training Budget

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Prerequisites for Success of EI

• National consensus on the necessity of EI • Financial stability of EI fund is important for overcoming unexpected high unemployment, and unemployment benefit scheme should be designed to guarantee financial stability of EI fund.

• Development of labor market infrastructure is essential for success of EI • Cooperation among related ministries • EI is not a perfect safety net for the unemployed. Complementary systems are necessary.

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• Building a social consensus on optimal level of contribution rates - Employers ask to lower contribution 20

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