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IDB: Transformation: Skills for Productivity, in Chile Financing Model for Training in Korea Jisun Chung (June 5, 2014) Korea Research Institute for Vocational.

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Presentation on theme: "IDB: Transformation: Skills for Productivity, in Chile Financing Model for Training in Korea Jisun Chung (June 5, 2014) Korea Research Institute for Vocational."— Presentation transcript:

1 IDB: Transformation: Skills for Productivity, in Chile Financing Model for Training in Korea Jisun Chung (June 5, 2014) Korea Research Institute for Vocational Education and Training 1

2 Educational System of Korea Elementary School Middle School High School Vocational HS Junior College University MOE MOEL (EI) Compulsory Education Polytechnics VTIs KUT VE VT VET SectorAge School Year

3  Step-by-step attainment of universal education: primary → secondary → higher (tertiary) education Trow, “Forms and Phases of Higher Education”: Elite( 70%) Trajectory of Educational Expansion 3

4 Vocational Training and Ministry of Labor Vocational Training Act (1967) Act on Special Measures for Vocational Training (1976) Employment Insurance Act (1995) Vocational Training Promotion Act (1999) Employment Insurance Scheme under the authority of the Ministry of Employment and Labor (MOEL)  Three pillars: 1) Job Skills Development Program 2) Employment Stabilization Program 3) Unemployment Benefits 4

5 155 Number of Trainees who underwent Vocational Training during 2 nd (1967~1971) to 7 th (1992~1996) National Economic Development Plans 10 totalIn-plant training 5

6 Number of Participants in Training

7 Changes in GDP per Capita since 1960s  : 100-times increase in GDP per capita only in 30 years. Drastic development as shown in the graph ‘70‘75‘80‘85‘90 ‘95‘00‘05‘10 ‘11 ‘60‘ ,471 21, times increase in GDP per capita ($) ‘13 ‘ ,

8 Classification of the Korean VTIs ClassificationNo.VTIs/Remarks Total2,777 Public VTIs Sub-Total79 Public Org.40KOPO, KUT, KEPAD (Korea Employment Promotion Agency for the Disabled) Local Govern.8Seoul, Other Provinces Min. of Justice31 Inmates ’ Vocational Competency Private VTIs Sub-Total2,698 Trg. Corporation55Non-profit Corporations WRD Center Women Resources Development 51 Women ’ s Vocational Competency MOEL Designated823Individual Designated VTIs, KCCI (Korea Chamber of Commerce and Industry) Others1,769Companies or Associations, etc. 8

9 Polytechnics in Korea The KOPO, head quarter of Korea Polytechnics, was separated from HRD Korea that established by MOL, in The KOPO is the biggest VT institution in Korea and trains about 20,000 technicians a year and over 85% of graduates are employed at enterprises. High School Graduates 2years 1 ~ 2years 1month ~ 1year College Graduates Craftsman Residents Engineer Technician Master Craftsman enter graduate Bachelor Deg Associate Deg No Degree [Training Courses] Polytechnics 9

10 Present Status of KOPO Short-term Training Courses : Up-grade, Residents, Inferior, Women, etc Most of Training Dep’t concentrated on Technology Field. 10

11 Seoul-Jeongsu Campus Korea Polytechnics Textile-Fashion Campus Korea Polytechnics 11

12 Needs of industries for Education Response of 223 companies Practice Field training creativityCurriculum meeting needs Teaching method Experience of staffs 12

13 Industry & Academia Cooperation Companies pay high cost for reeducation of new employees – 20 months, 55,000 US dollars per new employee To minimize this reeducation cost, companies cooperate for college education - development of curriculum and textbook together, lecture, seminar, field training, internship 13

14 Polytechnic Colleges Policy Specialized Training Policies FL System – Factory Based Learning : Same Training Circumstance as Factory – Training Curriculum based on Job/task Analysis Extension of Convergence Technology – Technology combined with other Technology or Human Studies Strong Relationship with Companies – Various Affairs based on School-Industry Cooperation – One Professor connected with Ten Companies – Company centered Customized Training 14

15 Employment Insurance as financial support mechanism for Training ☞ Employment Insurance (funding project) was introduced in 1995 by the Ministry of Employment and Labor as a social safety net. The EI is a comprehensive labor market policy and a social security system including employment security and vocational skills development programs - aimed at preventing unemployment and promoting employment as well as a traditional unemployment insurance program providing unemployment benefits. 15

16 Levy-Grant System Every company is obligated to pay the imposed training fees o f the employees, and the government pay back when the traini ng implemented. Employer, employees and the unemployed are free to provide or receive vocational training, and the EIS Fund grants subsidi es for the training implemented. More favorable for large enterprises; The return rates is flexible for the SMEs which are vulnerable in terms of conditions to implement training. 16

17 Employment Insurance for all workers Support for skills development of the employers, employed, job seeker, self-employed Coverage: All Workplaces - Since October 1998, all workplaces with one or more employee have been subject to the Employment Insurance System. Companies implement training for the employees autonomously, government induces and encourages the companies to develop human resources needed by supporting financially. 17

18 Annual Training Budget 18

19 Prerequisites for Success of EI National consensus on the necessity of EI Financial stability of EI fund is important for overcoming unexpected high unemployment, and unemployment benefit scheme should be designed to guarantee financial stability of EI fund. Development of labor market infrastructure is essential for success of EI Cooperation among related ministries EI is not a perfect safety net for the unemployed. Complementary systems are necessary. 19

20 Building a social consensus on optimal level of contribution rates - Employers ask to lower contribution 20

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