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Dualization explains analogous changes in South Korea and Japan like labor market segmentation and the expansion of social protection for nonstandard workers. This study argues，however, that their institutional structures and underlying dynamics of dualization are more different than they appear，where the subcontracting relations between big businesses and their suppliers come into play. The cooperative inter firm relations in Japan become a buffer with which firms incrementally adjust to a coupled dualization in the labor market and social welfare system. Thus, Japanese nonstandard workers excluded from the social insurance system exist because of the formally segmented structures of labor markets and social welfare programs. By contrast, the exploitative subcontracting relations in South Korea intensify labor market segmentation and undermine government regulation of labor and social welfare, leading to a decoupled dualization. Those in South Korea persist despite the formally inclusive and unified structures of social welfare programs. [ABSTRACT FROM AUTHOR]