TY - JOUR
T1 - Social insurance in an aging population
T2 - Impacts of a government transfer program in south korea
AU - Koh, Kanghyock
AU - Yang, Hyunjoo
N1 - Funding Information:
In response to the worsening elderly poverty issue, in 2008, the Korean government introduced a new social insurance program referred to as Basic Old-Age Pension (BOAP). This noncontributory program provides supplemental cash income to poor elderly citizens. Although this program is called a pension, it is more similar to a means-tested elderly welfare program, such as the Supplemental Security Income program in the United States. Before the introduction of the BOAP, the elderly received public income support from the National Pension Scheme (NPS), National Basic Livelihood Security (NBLS), and the Pension for Elders (PE) program. Implemented in 1999, the NPS is a contributory pension scheme that covers the general population. The NBLS, introduced in 2000, provides a minimum income guarantee for poor households below the poverty line.4 The PE, which was replaced by the BOAP in early 2008, provided a monthly income of about ₩50,000 for poor elderly. However, because of strict eligibility criteria for the NBLS and PE, only 15% of elderly individuals aged 65 years or older were supported by these two programs. In 2008, 7.5% of elderly individuals aged 65 years or older were covered under the NBLS, according to the Ministry for Health and Welfare.
Funding Information:
We thank the editor, Marcel Fafchamps, an associate editor, and two anonymous reviewers for their thoughtful comments. We also thank Anna Aizer, Nathaniel Baum-Snow, Kenneth Chay, Andrew Elzinga, Raphael Franck, Bruno Gasperini, Hyojin Han, Daeho Kim, Jinyoung Kim, Seonghoon Kim, Emily Oster, David Weil, and many seminar participants for useful discussions. All remaining errors are ours. This work was supported by Incheon National University Research Grant in 2018. Contact the corresponding author, Hyunjoo Yang, at hyang@sogang.ac.kr. 1 The World Bank (2016) reports that these middle-income countries in East Asia have or are expected to become aging societies faster than other countries, such as the United States and the United Kingdom, did previously.
Publisher Copyright:
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PY - 2021/7
Y1 - 2021/7
N2 - We study the effects of a new social insurance program for the elderly on their private cash transfers from adult children, living arrangements, and labor supply in South Korea. Using nationally representative household survey data, we find robust evidence that the social insurance program reduced private cash transfers from adult children. The estimated crowding-out effects are around −1. However, we find little impacts of the policy on the probabilities of coresidence with adult children or grandchildren and the elderly labor supply measured by employment and working hours. The results imply that social insurance may not effectively reduce poverty among the elderly in Asian countries where private support from adult children to parents is pervasive.
AB - We study the effects of a new social insurance program for the elderly on their private cash transfers from adult children, living arrangements, and labor supply in South Korea. Using nationally representative household survey data, we find robust evidence that the social insurance program reduced private cash transfers from adult children. The estimated crowding-out effects are around −1. However, we find little impacts of the policy on the probabilities of coresidence with adult children or grandchildren and the elderly labor supply measured by employment and working hours. The results imply that social insurance may not effectively reduce poverty among the elderly in Asian countries where private support from adult children to parents is pervasive.
UR - http://www.scopus.com/inward/record.url?scp=85104351015&partnerID=8YFLogxK
U2 - 10.1086/705021
DO - 10.1086/705021
M3 - Article
AN - SCOPUS:85104351015
VL - 69
SP - 1301
EP - 1322
JO - Economic Development and Cultural Change
JF - Economic Development and Cultural Change
SN - 0013-0079
IS - 4
ER -