This paper examines the changes in the Korean welfare regime during the decade of the liberal government, which extends from the Kim Dae-jung to the Roh Moo-hyun government. To this end, this paper first examined the changes in the industrial structure that underlie the welfare regime. During the decade of the liberal government, Korea s industrial structure has been strengthened by an export-led growth system centered on large conglomerates that relied on automation to exclude labor and skills. The gap between large enterprises and SMEs widened and the linkages were weakened. Under these conditions, the welfare expansion of the social insurance has made a thick barrier between the group covered by the public social security system and the group that were excluded. Ultimately, during the decade of liberal government, Korean society was divided into three different groups.