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The 2015 welfare reform of the National Basic Livelihood Security System in South Korea: Effects on economic outcomes

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  • Jaehyun Nam
  • Hyungjohn Park

Abstract

In July 2015, South Korea’s National Basic Livelihood Security System (NBLSS) was reformed for the purposes of eliminating welfare blind spots and reducing poverty. The reform is expected to affect the recipients’ economic behaviours and choices. In this study, we used changes in benefits and eligibility for the NBLSS under the customised benefit system to identify the effects of the change in the NBLSS on a proposed set of economic outcomes – income, labour supply, consumption, savings, poverty reduction. To estimate the effects, we used data from the 10th–12th waves of the Korea Welfare Panel Study and employed a difference‐in‐differences framework integrated with the propensity scores. We found that the NBLSS helps the poor to reduce financial and material hardships through income and consumption increments, but that it does not provide disincentives to the recipients from participating in the labour market or from saving.

Suggested Citation

  • Jaehyun Nam & Hyungjohn Park, 2020. "The 2015 welfare reform of the National Basic Livelihood Security System in South Korea: Effects on economic outcomes," International Journal of Social Welfare, John Wiley & Sons, vol. 29(3), pages 219-232, July.
    • Handle: RePEc:wly:injsow:v:29:y:2020:i:3:p:219-232
    DOI: 10.1111/ijsw.12416
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    2. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2009. "The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences," NBER Working Papers 15181, National Bureau of Economic Research, Inc.
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