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KMID : 1124020150310030049
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Korean Social Security Studies
2015 Volume.31 No. 3 p.49 ~ p.74
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A Study On Effectiveness Of Unemployment Credit In National Pension: Analysing Benefit Adequacy And Applicability
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Kim Jin-Soo
Kwon So-Young
Yoo Hye-Rim
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Abstract
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The paper analyses unemployment credit(UC) in Korea National Pension. Benefit adequacy and applicability are used as the two criteria of analysing. To evaluate the adequacy of the benefit, this study compares Korean UC with that of Germany, United Kingdom, France and Japan by sub-criteria of coverage, reference earning, crediting period and financing. The characteristics of the UC in Korea compared to that in the other countries is followed. First, the UC in Korea only covers recipients of unemployment benefit in Unemployment Insurance(UI) while that of the other countries tries to cover all the unemployed. Second, reference earning of the UC in Korea is so small that it can adversely affect the amount of pension. Third, UC of Korea credits relatively shorter period in that the credited period is limited in a year. Considering National Pension in Korea has relatively longer qualifying years, it can limit the adequacy of the UC. Lastly, Korean UC is the only system which the recipients themselves should contribute(a quarter of one``s contribution) to the pension scheme. To evaluate applicability of Korean UC, the merged dataset of the individual dataset and work history dataset of 14th and those of 15th of Korea Labor and Income Panel Study (KLIPS) is used. The statistical findings suggest that since the coverage of the UC is connected to unemployment benefit coverage in UI, it shares the blind spot of UI which is not wide enough to cover the unemployed. Especially, those who are within the blind spot are found to be more vulnerable than those who are not, which means it lacks in targeting vulnerable people in labour market. The paper concluded that the UC in Korea cannot fulfill its goal of social protection. Therefore, there needs to be extension of coverage and improvement in the level of provision.
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KEYWORD
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National Pension, Unemployment Credit, Unemployment Insurance
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