Welfare Restructuring in Taiwan: the Example of Old Age Income Security

This article seeks to analyze the restructuring of the welfare system for old age income security in Taiwan since the 1990s and to identify factors explaining th is development. During the last two decades, the old age income security system in Taiwan experienced a permanent construction and restructuring. Substantial changes have taken place seen in three institutional areas, following different developmental pathways: (1) initiation and expansion of a quasi-"basic pension system" based on various status-differentiated, tax financed old age allowance schemes targeted on people over 65 without any support of social benefits ; (2) reform and retrenchment of the existing occupation-based social security system, including occupational social insurance schemes (since 1950s), public pension schemes for civil servants (since 1960s), and the mandatory occupational pension for employers (since 1984); (3) establishment of a national pension insurance system for the working-aged excluded from the occupation -based social security system mentioned above . I argue that this multi-dimensional restructuring is influenced by the interactions of three factors, namely: (1) the welfare system developed before the political transformation and its legacies; (2) the role and function of democratic elections and political parties in social interest representation; (3) the semi-presidential system for policy-making. During the democratic transformation and consolidation, different patterns of interaction between these three factors generate distinct pension politics that have effects on different institutional areas and i nfluence the dynamics of next round pension development. In general, it can be said that this restructuring in democratic Taiwan consolidates a pension system with predominantly two pillars that strengthens the public commitments in the old age income security, but does not emphasize the responsibility of individual, family or market which usually had been identified as the main source of social welfare in East Asia.

This contrasts not only sharply with the focus on privatization encouraged by influential international agencies, but also with the conventional productivist/developmental welfare state
perspective in explaining the East Asian welfare state development.


Dr. Chen, Ming-fang
Assistant Professor, Department of Social Welfare
National Chung Cheng University, Taiwan.