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KMID : 1001320170440020005
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Social Welfare Policy
2017 Volume.44 No. 2 p.5 ~ p.27
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Old-Age Income Protection Effects of Raising Mandatory Coverage Age across Generation in the Korean National Pension Scheme
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Woo Hae-Bong
Han Jeong-Lim
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Abstract
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Protection for the uninsured remains an important concern for the National Pension scheme in South Korea. Using the National Pension Service (NPS) Database, this study empirically analyzes old-age income protection effects of increasing the mandatory coverage age from 59 to 60-64, following the adjustment measure in the retirement (pensionable) ages of the 1998 pension reform. The results indicate that raising the pension coverage age has substantial effects on old-age income security. Overall, the data indicate that the change in the mandatory coverage age increases the National Pension take-up rate (3.8 percent point) as well as the income replacement rate (4 percent point). Given the expansion of higher education and delayed entry into the labor-market, this study suggests that raising the pension coverage age can play a valuable role in improving old-age income adequacy in South Korea.
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KEYWORD
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Korean National Pension scheme, mandatory coverage age, old-age income protection effect
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