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KMID : 1124020230390010003
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Korean Social Security Studies
2023 Volume.39 No. 1 p.3 ~ p.41
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The Effect of Contributions Subsidy for Individually Insured Persons on Their Old-age Income Security Using the Dynamic Microsimulation Model
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Ryu Jae-Rin
Kwon Hyuk-Jin
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Abstract
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This study examines the long-term effect of contributions subsidy for Individually Insured Persons (hereafter CS) on their old-age income security by using the dynamic microsimulation model. The main results are as follows. First, the study estimated that the CS in National Pension has a negligible impact on the take-up rate of the pension benefit-2.56~3.9%p increase on average for CS recipients-. Second, although the effect of CS on the monthly pension is expected to be negligible, it is expected to have a significant effect on the monthly pension of CS recipients. The CS is expected to increase the monthly benefit amount of CS recipients by about KRW 12,000. Third, for all old-age pension beneficiaries, the effect of CS is more significant in the middle-income group than in the lower-income group. In the case of CS beneficiaries, the effect is expected to be the biggest in the lowest-income group. Fourth, even if the level of CS, support periods, and percentage of renewing the payment are raised, the additional effect is not expected to be significant. The implications derived from the results are as follows. First, the evaluation of the social insurance contribution support project should be made from a longer-term perspective. Second, to increase the effect of CS's old-age income security, the support period and support level must be improved simultaneously. Third, considering that the effect of system improvement was insignificant even when applying scenarios that improve the support period, support level, and re-participation rate, this study suggests expanding the target of the CS.
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KEYWORD
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National Pension Scheme, Contributions Subsidy for Individually Insured Persons, Microsimulation model
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