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Shaky social insurance foundation: Income instability and pension participation in South Korea

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  • Wei‐Ting Yen

Abstract

Objective Many welfare states in young democracies feature low effective social insurance coverage, especially in old‐age pension. What explains the ineffective coverage? This article shows individual income instability is a microlevel factor contributing to low effective coverage. Method The article used 15 waves of the Korean Labor Income Panel Study and constructed a fine‐grained individual‐level income instability measure, which was used to predict individual participation in state‐run public pension using (multinomial) logistic models with industry, occupation, and cohort fixed effects. Result The article shows that income instability is negatively associated with public pension participation, and the negative relationship becomes larger as income level increases. Moreover, income instability inhibits only participation in state‐led risk pooling, but not in private self‐insuring. Conclusion The article sheds light on disentangling an individual‐level factor buttressing young welfare states and bears implications for the future contour of welfare states in young democracies.

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  • Wei‐Ting Yen, 2022. "Shaky social insurance foundation: Income instability and pension participation in South Korea," Social Science Quarterly, Southwestern Social Science Association, vol. 103(3), pages 494-508, May.
    • Handle: RePEc:bla:socsci:v:103:y:2022:i:3:p:494-508
    DOI: 10.1111/ssqu.13136
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