Is There an East Asian Pension Model? A Comparison of Pension Systems in Korea, China and Japan

The purpose of this paper is to compare public pension systems of Korea, China, and Japan in light of a principle of social solidarity. Despite the fact that Korea, Japan, and China have adopted pension systems rather recently compared to western countries, three nations have experienced drastic developments and modifications in their systems in short period of time. The Japanese and Korean pension systems achieved a universal pension coverage in the early 1960s and late 1990s respectively. China has adopted a new pension scheme to achieve a goal of universalism since the 1990s. At this point, we can try the comparisons of the pension schemes of these countries because all the basic structures of the schemes are in place.  Considering the importance of pension system in welfare provision system, the present research can ultimately serve as an important rationale in discussing the existence of a unifying principle of East Asian social welfare model. Pension systems can be examined from different frameworks. For example, the OECD report, Pension at a Glance, uses both multi-pillar framework and benefit type in classifying Asian pension systems. First, from a multi-pillar framework, pension system can be divided into the first-pillar that has redistributive factors and the second-pillar that has the insurance component. Second, they also classify the system based on how the benefits are determined, such as DB and DC. In this paper, we would like to focus on the social solidarity perspective in comparing the basic structure of Korean, Japanese and Chinese pension systems. Pension system is a collective endeavor that diversifies old-age income risks through social solidarity. Therefore, analysing the principles of social solidarity underlying each nation's pension system is of vital importance in understanding the characteristics of each nation's pension system. Furthermore, it can also provide us with an insight to see if these nations show similar patterns and would be categorized as having a similar pension model. That is, it gives us the key criteria of seeing whether there is a single pension system design in East Asia. This study has cast considerable doubt on the possible single East Asian welfare model from solidarity principles in the pensions systems.