Discussion of Moral Hazard in the Taiwan’s Short-Term Active Labor Market Policy

The Diverse Employment Development Program is an important short-term active labor market policy implemented more than ten years in Taiwan. Most of the researches in the past all mentioned about its benefit, but there are still many literatures indicated the problems of manpower utilization in the units participating in the DEDP. This paper tries to discuss Moral Hazard, one of the important factors, in theoretical point of view. The authors use document analysis and in-depth interview to conduct the research, and try to inspect whether there is Moral Hazard existed in the units. After interviewing twelve organizations, located in Yunlin, Chiayi, and Tainan, the authors draw three conclusions as follows: 1) Moral Hazard in the organizations implementing the DEDP isn’t obvious, and it won’t affect the operation of the organization seriously. 2) The incidence of Moral Hazard may have a connection with the characteristic of an organization but little relevance to its property. 3) The timing to announce the staff retention roster may not affect the possibility that Moral Hazard happens to an organization, but the way to announce it may influence the possibility that Moral Hazard happens to an organization. The authors hope these three conclusions can assist the further research in the future.