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KMID : 1124020050210010001
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Korean Social Security Studies
2005 Volume.21 No. 1 p.1 ~ p.29
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Work Incentive Effects of the National Basic Livelihood Protection Program and New Policy Proposals: Focusing on the Self-Sufficiency Program
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Ku In-Hoe
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Abstract
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This study examines various aspects of work activities and participation behaviors for the Self-Sufficiency program by the recipients of the National Basic Livelihood Protection program (NBLP). It also assesses various policy proposals for improving the Self-Sufficiency program. The 100% benefit reduction rate for the cash benefit of NBLP and the linkage between the cash benefit and the in-kind benefits, combined with the work requirement for able-bodied recipients, reduce work hours of some recipients. Among recipients required to participate in the Self-Sufficiency program, a significant share of a relatively capable group of people does not participate. A majority of participants are concentrated in programs requiring low labor intensity and/or only participate perfunctorily. According to an assessment of policy proposals in this study, an earnings disregard is expected to increase employment and work hours of recipients, although it may not increase exits from NBLP. Both introducing the Earned Income Tax Credit and severing the linkage between the cash benefit and the in-kind benefits would increase work and encourage exits from the NBLP cash program, while contributing to economic security for low-income families. Improving imposition of the work requirement, keeping benefit levels differentiated according to labor intensity, and extending differentials in financial reward would increase participation in the Self-Sufficiency program.
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KEYWORD
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Self-Sufficiency program, National Basic Livelihood Protection program, Earnings disregard, Earned Income Tax Credit
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