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Evaluating the social security subsidy program in Korea

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“Social security subsidies in Korea were introduced in 2012 to reduce the coverage gap in social security. Despite the large fiscal cost, however, the subsidies have only a small effect on the social security coverage: For every 1,000 workers and their employers who are subsidized under the program, the program added just 15 workers covered by social security. Rather than pursuing costly subsidization policies, the Korean government needs to make serious efforts for more efficient collection of social contributions to close the coverage gap in social security.”
Ⅰ. Introduction
To reduce the coverage gap in social security, the Korean government began to provide subsidies for the social security contributions of low-wage workers and their employers in small establishments.
1) The program is called the Dooroonoori social security subsidy.
The Korean government provides subsidies for the social security contributions of some workers and employers.1) The subsidies are designed to reduce the coverage gap in social security, which is estimated to be no less than four million workers. The fiscal cost, however, exceeds 0.5 trillion won a year, a major portion in the annual budget of the Ministry of Employment and Labor. Given the amount of public money used, it is
KDI FOCUS
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important to examine how effective these subsidies are in closing the coverage gap. This brief, based on a recent study, uses a large administrative data set from the National Pension Services to evaluate


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Title Evaluating the social security subsidy program in Korea
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Material Type Articles
Author(English)

Kim, Dohyung

Publisher

Sejong, South Korea:Korea Development Institute

Date 2016
Journal Title; Vol./Issue KDI Focus:no. 75
Pages 7
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Social Development < Social Welfare
Holding Korea Development Institute

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