Low Public Expenditures on Social Welfare: Do East Asian Countries have a Secret?

Abstract

This paper explores the sources of low public expenditures on social welfare in Japan, Korea, Taiwan, Hong Kong and Singapore. Six factors are analysed based on aggregate data: the public/private mix of welfare programmes, the age structure, the maturity of old‐age pension schemes, the population coverage of social security, the relative generosity of social security and the role of enterprises and families as alternative providers of welfare. The evidence allows putting some conventional statements about the virtues of East Asian welfare states into questions. Public expenditures on welfare are bound to rise a lot in Japan, Korea and Taiwan, while the level of protection in Hong Kong and Singapore is well below the standards of Western countries.