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KMID : 1124020190350030039
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Korean Social Security Studies
2019 Volume.35 No. 3 p.39 ~ p.72
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The Effect of Unemployment Credit in National Pension on Old-Age Income Security: Long-term prospects by using micro-simulation model
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Lee Dah-Mi
Kwon Kyuk-Jin
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Abstract
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The study aims to examine the long-term effect of the unemployment credit (hereafter UC) in National Pension on old-age income security for the birth cohorts from 1991 to 2023 in terms of the take-up rate, the insured period, and the benefit level by using dynamic micro-simulation model. The study estimated that the UC in National Pension has a small impact on the take-up rate of the pension benefit - 0.3%p increase on average - but has a relatively bigger impact on men’s than women’s; that the effect of UC in National Pension on the probability of securing old-age pension entitlement is bigger in lower income group, while the effect on the insured period is the biggest in the middle income group; that raising the level of the pensionable earning (50% of the final average salary before getting unemployed) to 100% has little effect on the increase in the pension benefit level in all cohorts and income groups; that raising the pensionable earning to 100% (of the final average salary before getting unemployed) is more effective in increasing the pension benefit level than extending the insured period to 24 months, and the effect is bigger in the upper income group. This paper suggests to relax the conditions for the entitlement of the UC in National Pension linked to the job seeker’s benefit in Employment Insurance, raise the level of the pensionable earning, and extend the insured period.
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KEYWORD
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National Pension, Unemployment credit, Old-age income security, Employment insurance, Micro-simulation model
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