Origins
Unemployment insurance as a national program dates to Britain's National Insurance Act of 1911. Korea, with little joblessness during rapid growth, adopted it late: the Employment Insurance Act passed in December 1993 and took effect on 1 July 1995, first for firms with 30 or more workers. When the 1997 Asian financial crisis threw over a million people out of work, coverage was extended to every workplace in October 1998. Later came voluntary coverage for the self-employed (2012), artists (December 2020) and gig and platform workers (July 2021); see platform labor.
Who pays
As one of Korea's four major social insurances, the premium is withheld from pay. The unemployment-benefit premium is 1.8% of wages, split 0.9% each between worker and employer; employers alone pay 0.25–0.85% for job-retention and training programs. The fund also finances parental leave pay and training vouchers.
How much and for how long
The jobseeker benefit pays 60% of average wage, with a 2026 daily cap of 68,100 won and a floor of 80% of the minimum wage (66,048 won for an 8-hour day). You need 180 insured days in the 18 months before leaving, and generally an involuntary separation.
| Insured period | <1 yr | 1–3 | 3–5 | 5–10 | 10+ yrs |
|---|---|---|---|---|---|
| Under 50 | 120 days | 150 | 180 | 210 | 240 |
| 50+ or disabled | 120 days | 180 | 210 | 240 | 270 |
Benefits must be used within 12 months of leaving (Ministry of Employment and Labor, n.d.).
What economists say
Baily (1978) framed the trade-off between smoothing consumption and dulling job search. Gruber (1997) found benefits sharply cushion the post-layoff drop in spending; Meyer (1990) and Katz and Meyer (1990) showed re-employment spikes as benefits expire and longer durations stretch unemployment. Chetty (2008) argued much of that effect reflects liquidity rather than moral hazard: people without savings cannot afford to wait for a good match.
Checklist
- Check your insured history online if premiums are missing from your payslip; coverage can be applied retroactively.
- After leaving, confirm your employer filed the separation report, then register as a jobseeker.
- Report any part-time income while receiving benefits.
- Fixed-term workers whose contracts end are generally eligible.
FAQ
- Are part-timers covered?
- Generally yes if they work 60+ hours a month, or for three months or longer even with fewer hours.
- Can I get benefits if I quit?
- Only with a legally recognized cause, such as unpaid wages, impossible commutes or workplace harassment.
Sources reviewed: 2026-11-02
References
- Baily, M. N. (1978). Some aspects of optimal unemployment insurance. Journal of Public Economics, 10(3), 379–402. Founding model of optimal unemployment benefits.
- Chetty, R. (2008). Moral hazard versus liquidity and optimal unemployment insurance. Journal of Political Economy, 116(2), 173–234. Shows much of the benefit effect reflects liquidity, not just moral hazard.
- Meyer, B. D. (1990). Unemployment insurance and unemployment spells. Econometrica, 58(4), 757–782. Re-employment spikes as benefits run out.
- Katz, L. F., & Meyer, B. D. (1990). The impact of the potential duration of unemployment benefits on the duration of unemployment. Journal of Public Economics, 41(1), 45–72. Estimates how longer benefit duration lengthens unemployment.
- Gruber, J. (1997). The consumption smoothing benefits of unemployment insurance. The American Economic Review, 87(1), 192–205. Measures how benefits cushion the drop in consumption after job loss.
- 국가법령정보센터. (n.d.). 고용보험법. Full text of the Employment Insurance Act.
- 고용노동부. (n.d.). 실업급여의 지급기간 및 지급금액 [자주 하는 질문]. Ministry FAQ with the 120–270-day benefit table.