How Fertility Crisis and Immigration Shape Welfare States in East Asia : Intergenerational Politics under Labor-Market Dualism

Cheol-Sung Lee (이철승)

Nearly all advanced industrial societies suffer from declining fertility and increasing immigration. What are the impacts of declining fertility and increasing immigrants on the welfare states? How do the welfare regimes, especially under dualized labor markets, handle these double movements? How do these double movements affect partisan politics in these societies? Do there exist different fertility-immigration-welfare regimes? How do they handle these changes differently?


To answer these questions, this book project seeks to explore how fertility crisis and immigration shape the welfare regimes and how the welfare regimes respond to these double movements. Especially, the project focuses on conservative welfare regimes including South Korea in which insider vs. outsider conflicts under dualized labor markets have emerged along with the welfare state development. In this type of countries, the welfare state is either underdeveloped or dualistic based on labor market status. In underdeveloped welfare states with relatively high fertility rates, immigration does not affect median voters’ core criteria of party preferences. Parties do not have clear agendas for immigration yet. However, in countries with serious low fertility issues and rapidly aging population (e.g. Taiwan and S.Korea), immigration emerges as an alternative source of labor supply. In these countries, the state typically does not impose strict barriers against immigrant work forces, and underdeveloped welfare states do not pose a serious concern for the exploitation of the existing system by immigrants. Rather, in these countries, dualistic labor markets in couple of immigration lead to a more serious perpetuation and reinforcement of insider-outsider problem. The influx of immigrants into low-wage labor market especially in service sector exerts downward pressure on both unskilled, non-standard native workers’ wages. Furthermore, their ineligibility for social welfare system (due to their status as ‘non-standard workers’) further jeopardizes both native non-standard and competing immigrant workers’ living standards during their old ages or unemployment. Therefore, in these societies, dualistic labor market will be further reinforced due to immigration.


The study further investigates how these double movements could be interwoven with inter-generational politics. As extremely low fertility rates have not been compensated by immigration, in this type of fertility-immigration regime, social insurance systems become in jeopardy due to increasing generational conflicts due to increasingly higher burden of contribution for younger generations. Younger generations may be enticed by right-wing parties’ ‘individualized solutions’ based on private market in couple with retrenchment in traditional social insurance schemes. Older generations will attempt to defend their ‘turns’ as beneficiaries of ‘un-funded systems’, thereby supporting political parties that best defend their (promised) social benefits. Also, younger generations on the verge of entering labor markets may be intimidated by increasing immigration, while older generations occupying labor market insider positions are less likely threatened by the same pressure. Therefore, double movements may not only exacerbate the existing insider-outsider conflict, but also engender inter-generational conflicts.


The study will attempt to propose new theoretical models to explain how two newly emerging structural changes of our time - declining fertility and increasing immigration, shape welfare regimes and labor market institutions, and further investigate how such transformation incur new inter-generational conflicts, thereby transforming the social base of partisan politics.


The project will help both scholarly and policy communities better respond to fertility crisis and the influx of immigration by way of better configured social policies and political coordination.