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KMID : 1124020150310040161
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Korean Social Security Studies
2015 Volume.31 No. 4 p.161 ~ p.185
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The Impacts of the ‘98 and ‘07 Korean National Pension Reforms on Old-Age Income Protection by Income Level
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Woo Hae-Bong
Han Jeong-Lim
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Abstract
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Using the national pension database, this study analyzes the impacts of the 1998 and 2007 national pension reforms on old-age income security. The data indicate that, compared to the early cohorts, income-level differences in the impacts of the pension reforms were greater for the recent cohorts. While the reduction in pension benefit was greatest for the highest income group, the lowest income group was affected most severely in income replacement rates. Overall, as a result of the pension reforms, the Korean national pension is expected to play mainly the role of alleviation of old-age poverty instead of consumption smoothing. However, the results indicate that preventing old-age poverty also could be difficult, in particular, for the lowest income group. Further, for the highest income group, the retreat of the state from the national pension also has the potential for fostering private pensions, given the mere role of preventing old-age poverty.
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KEYWORD
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Korean national pension, pension reform, income level, pension adequacy
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