Basic Old-Age Pension Research Articles

Накопичувальне пенсійне забезпечення в системі трансформаційних пріоритетів післявоєнної відбудови України

The aim of the article is to disclose a systematic approach to the formation of mandatory accumulative pension provision on the basis of the object-subject approach in the coordinates of «effectiveness – risks». The system of mandatory accumulative pension provision is proposed to be considered as an aggregate of interrelated elements, in particular, such as: objects, subjects, tasks, principles, sources of financing and other components that ensure effectiveness and focus on achieving social and economic effect, taking into account the existing risks of external and internal nature. The main objective of such a system is specified, which is to accumulate a sufficient amount of pension contributions to ensure appropriate pension payments, taking into account the need to form investment income adjusted for the inflationary component, existing risks and restrictions on the placement of pension assets. It is noted that the accumulative mandatory pension provision in the conditions of wartime and post-war recovery of Ukraine should be considered as an element of the transformation of the pension system. The social effect is achieved in the form of accumulation of a supplement to the basic old-age pension for pensioners, which reflects the receipt of pension payments both immediately and in installments under the agreement and depends on the diversification of investments in cash on deposit pension accounts, assets in securities and other assets not prohibited by current legislation. It is expedient to consider the economic effect as a source of financing economic transformations through stock market instruments that activate the mobilization of financial resources for investment in various sectors of the economy. It is proposed to identify specific risks of accumulative pension provision, which include: operational, investment, risks of unbalanced liquidity; environmental, social and governance risks associated with the pension portfolio and its management, interest rate risk. Further research will be aimed at developing a conception for the development of pension provision in Ukraine in the post-war period, taking into account the legal, financial and organizational foundations for the introduction of mandatory accumulative pension provision.

Correlation between income changes in the elderly receiving the basic old-age pension and suicide rates

As of 2018, the highest suicide rates in Korea occur in the elderly, defined as aged 65 or older. There are several factors that influence the suicide rate in the elderly population, but one is economic poverty. The elderly poverty rate is defined as the percentage of elderly people with median or lower incomes. The purpose of this study was to examine the correlation between the basic pension paid to the elderly in Korea and suicide attempts. This study retrospectively reviewed data registered in the Emergency Department-Based Injury In-Depth Surveillance Database in South Korea from 2011 to 2017. In this study, people aged 60 to 64 years formed the control group, and those aged 65 to 69 years formed the treatment group. Difference-in-Differences (DID) was used for analysis. This study confirmed that the rate of suicide attempts among the elderly decreased by about 0.07% when they received the basic pension. The ratio of the number of suicidal patients (self-reported) to the total number of patients aged 60 to 69 was 0.62%; this ratio was reduced by about 10% among 60- to 69-year-olds receiving the basic pension. The same ratio pattern was found by a sensitivity analysis between groups with different age differences. This is the first study to investigate the correlation between the basic pension and suicide ideation in the elderly population of Korea. This study provides valuable insights, which will contribute to finding ways to prevent elder suicides in Korea through social approaches.

The Association Between the Basic Old-Age Pension and Depression of the Older Adults in Korea.

ObjectivesThe purpose of this study was to investigate the association between the Basic Old-Age Pension (BOP), which is a noncontributory pension, and depression in BOP beneficiaries in Korea.MethodsWe used the second and third waves (2007-2008) of the Korea Welfare Panel Study to identify the effect of the BOP on mental health in the year of its introduction. The Center for Epidemiological Studies-Depression Scale, applied in a Korean context, was used to evaluate mental health. To analyze the effect of the BOP, a difference-in-difference approach was used in analyses of all subjects and subgroups.ResultsFor this study population of 760 adults, the BOP did not have a statistically significant relationship with depression in its beneficiaries. After controlling for type of household, the BOP was still not associated with lower reporting of depression, either in single-beneficiary or double-beneficiary households, in the year of the benefit.ConclusionsThe BOP policy had no significant relationship with the level of depression among recipients. However, this should not be interpreted as implying that income subsidy programs for older adults, such as the BOP, do not affect mental health, considering the importance of economic hardship in this population and the program’s socioeconomic effects.

Social protection for happiness? The impact of social pension reform on subjective well-being of the Korean elderly

Expanding the scope of the traditional indicators used to assess economic progress with measures of subjective well-being has been of growing importance in policy modeling. A recent Stiglitz-Sen-Fitoussi report argued that policy decisions and welfare evaluations should be approached from a broader perspective on well-being and take into account metrics derived from self-reports of living conditions. To this end, we evaluate the efficacy of the 2014 social pension reform in South Korea using various measures of subjective well-being. The South Korean government introduced a basic old-age pension in 2008 and doubled its monthly benefits in 2014. The reform in 2014 represents one of the largest social welfare expansions in South Korean history, with an aim to improve seniors’ quality of life. Using data from the Korean Longitudinal Study of Aging, we estimate a matched difference-in-differences model that isolates the causal effects of the benefit increase attributable to the reform. Results show that the reform was associated with an average of 4.8–5.7% increase in financial satisfaction among beneficiaries, and that this correlation was more pronounced for retirees, seniors above age 70, and those at the bottom of wealth distribution. However, there is insufficient evidence to conclude that satisfaction with health status, parent-child relationship, and overall quality of life has improved in response. Our findings are in contrast to the past evidence on objective welfare gains associated with pension expansion. Taken together this study calls for the use of self-reported well-being data in policy evaluation.

Adequacy Analysis of the Basic Old-Age Pension System Based on Local Administrative Data in China

There is no consensus on the judgment of the adequacy status of the old-age pension benefit in China at present. Therefore, clarification of various types of indicators and benchmarks of pension adequacy is urgently needed. According to the theoretical development of pension adequacy, this paper offers a comprehensive analysis of the benefit level of basic pension from the perspectives of poverty alleviation, income substitution, and financial sustainability. The calculation results based on local administrative data show that the current pension benefit in urban China is unbalanced: on the one hand, the average pension level of self and flexible employees cannot keep track of the local average consumption level or even the relative poverty standard in particular years and the individual replacement rates for a few nonstandard employees are less than the minimum standard of 40% set by the International Labor Organization, which means the pension benefit performs poorly in terms of consumption smoothing. On the other hand, the lifelong pension rights are much higher than the lifelong contribution obligations for new retirees. Under the trend of population ageing, the extremely high benefit–cost ratio means that the current retired generation is eroding the welfare of the current working generations, and the long-term financial sustainability of the pension system is facing challenges. In the future, in order to improve the benefit level of the basic old-age pension system in a sustainable way, we need to increase the average and individual replacement rates and reduce the benefit–cost ratio by consolidating contribution bases and delaying the number of contribution years.

The Impact of Fiscal Conservatism ; A Case Study of the 2007 National Pension System Reform in Korea

This research intends to identify the influential factors in the 2007 National Pension System (NPS) reform in Korea (the Republic of Korea) which drove the NPS toward a structural transformation. This research also examines the applicability of the theory of Clemens and Cook (1999) to the Korean policy shift, who argue that the innate driving force of a policy, an internal contradiction, can be a critical source of structural policy change. A literature review based case study was carried out in this research. The findings are as follows. Firstly, rising fiscal conservatism was the main determinant of the 2007 NPS structural reform. The processes and conditions of the reform documented were: the fiscal conservatism embedded in NPS generated serious policy problems and led to an accumulation of the internal contradictions within NPS by raising the question on its fundamental policy goal. As time passed without any self-correction mechanism with respect to the problematic policy, the NPS lost credibility in the eyes of the public and also lost policy legitimacy. At the same time, there was a competing policy alternative to the NPS. This was the universalistic tax-based Basic Old-Age Pension System. This has been a challenge to NPSin that it had been designed based on the social insurance financing principle. The pre-conditions for the structural NPS reform were fully complete and they could be exploited by self-interested political parties in the following policy-making stages. Secondly, the theoretical assumption that the internal contradiction of a policy can be a decisive power for structural transformation, as suggested by Clemens and Cook (1999) among others, was proven to be theoretically and practically accurate in the Korean public pension reform case.

Intergenerational effects of old-age pension on children's health and well-being.

This study estimates the impacts of the basic old-age pension reform in South Korea on childhood/adolescent health and well-being. Facing a rapidly aging population and the increasing demand for social security for the elderly, the government introduced the basic pension program in 2007, which covered 70% of citizens 65 years or older. Information is obtained from a nationally representative panel of school-aged children from 2006 to 2012. A difference-in-differences approach exploiting within-person variation in exposure to the old-age pension program is used. The unconditional cash transfers for the elderly have substantial impacts on the health of grandchildren. In particular, there is gender-specific differential impacts. While grandmothers' pensions have positive impacts on granddaughters' heights and drinking participation, grandfathers' pension incomes lower smoking participation of grandsons. Results suggest that grandmothers and grandfathers put their resources for their grandchildren in a different way. It also indicates that household is not a unitary entity.

Social policy and late-life happiness: the impact of the basic old-age pension on the happiness of older people in South Korea

PurposeThe purpose of this paper is to examine the relationship between social policy and late-life happiness by analyzing the impact of the basic old-age pension on the happiness of older people in South Korea.Design/methodology/approachPeople aged 65 and over selected from the Korean Longitudinal Study of Ageing are analyzed in the study.FindingsIt shows that the association between the basic old-age pension and the happiness of older people is negative. This may be attributable to the frugality of the benefits and the side effects of the means test.Originality/valueThis implies that the relationship between social policy and late-life happiness is not linear but it is affected by the context of the policy. It suggests that changing the fundamental benefit system to be more progressive can be a more useful policy option to realize the initial policy goal for recipients.

Factor Analysis Affecting Satisfaction of Elderly Life in an Aging Society

우리나라가 고령화 사회로 진입함에 따라 노인들의 삶의 질에 대해 점점 관심이 많아지고 있다. 따라서 노년층에 대한 인식과 삶의 방식이 이전까지와는 근본적으로 달라져야하며 노인도 자기 생성적으로 건강한 삶을 살아가려는 노력이 필요하다. 본 연구는 이를 위해 노인 삶의 만족도에 영향을 미치는 요인들을 분석하여 노인들의 자기생성적 삶에 도움을 주려고 한다. 분석을 위해 한국보건사회연구원 및 계명대학교 산학협력단이 실시한 노인실태조사의 5개년도 자료(1994, 2004, 2008, 2011, 2014)를 이용하였다. 자료 분석은 각 연도별 만 65세 이상 노인들을 대상으로 순서형 로지스틱 회귀분석과 의사결정나무를 이용하여 삶의 만족도에 미치는 영향에 미치는 요인들을 살펴보았다. 분석 결과 삶의 만족도는 감소하다 2004년 이후부터 보통수준의 만족도를 보였고, 기초노령연금이나 노인 일자리정책 등 노인 복지정책의 다양성으로 인해 삶의 만족도에 영향을 미치는 요인들이 점차 증가함을 알 수 있었다. 또한 경제적인 부분이 삶의 질에 영향을 미치고 있는 것으로 나타나 노인 연금의 증가는 선택이 아니라 필수적으로 이루어져야 할 사안이다.As Korea enters the aging society, the quality of life of elderly people is getting more and more attention. The perception of the elderly and the way of life should be fundamentally different from before, and elderly people need efforts to live a self-generating healthy life. This study has a goal to analyze the factors affecting the elderly life satisfaction and to help the elderly in their self-production. For the data analysis, we investigate the factors affecting the life satisfaction for elderly people aged 65 years or older using ordinal logistic regression analysis and decision trees, with the five-year data of the elderly survey conducted by the Korea institute for health and social affairs and Keimyung university. The results show that satisfaction with life had been decreased, but it showed a moderate trend since 2004. The factors affecting life satisfaction are increasing due to the diversity of elderly welfare policies such as basic old-age pension and elderly employment policy. In addition, the economic part is affecting the quality of life, so the increase of the elderly pension is not an option but a necessity.

The Effect of Income on Subjective Well-Being in Later Life: A Case Study of a Government Pension in South Korea

Objectives. Despite keen interest among scholars and policy makers, little is known about whether income affects subjective well-being (SWB) in later life, a notoriously difficult question to answer, given the empirical challenge of isolating the effect of income from correlated influences and the possibility of reverse causality. This paper examines the effects of the 2008 introduction of the Basic Old-Age Pension, a noncontributory old-age pension in Korea, on older adults’ life satisfaction. Methods. This research analyses the 2005, 2007, 2009, and 2011 waves of the Korean Retirement and Income Study and utilizes a difference-in-difference quasi-experimental design. Results. Both the anticipation of the pension in 2007 and its actual provision in 2009 increased older adults’ life satisfaction. However, evidence of the effect in 2011 was much weaker. Discussion. The additional income from the pension had a positive impact on life satisfaction in later life, suggesting that countries pursuing rapid industrialization should pay careful attention to how the benefits from growth are distributed across generations. However, the effect of a government pension might be short-lived, making it less attractive to governments whose goal is to raise long-term SWB.

Basic Old-Age Pension and financial wellbeing of older adults in South Korea

ABSTRACTSouth Korea's old-age poverty rate is among the highest in the developed world. Confronted with the increasing demand for a social safety net for older people, the South Korean government introduced the Basic Old-Age Pension (BOAP) in 2008. The BOAP is a non-contributory, means-tested pension covering 70 per cent of the elderly population, with monthly benefits amounting to 84 kW (thousand Korean won, approximately equivalent to US $1) for singles and 139 kW for couples. Little empirical research has been conducted, however, to evaluate the effectiveness of the new pension programme in supporting the financial wellbeing of older people. Using data from the 2008–2010 Korea Welfare Panel Study, a panel data analysis is conducted to estimate the effects of the BOAP on three sets of financial wellbeing measures: financial difficulty, monthly consumption and overall financial satisfaction. The results suggest that the BOAP has beneficial effects on the financial wellbeing of older people by improving affordability of basic subsistence items such as heating and nutritious meals, particularly among the older-old group. However, the effects are limited to these few outcomes only; overall financial wellbeing and other important indicators remain unchanged.

An evaluation of recent old-age policy innovations in South Korea.

In 2008, South Korea launched a Basic Old-Age Pension program, which provides income support for the bottom 60% of the population, and a universal Long-Term Care Insurance (LTCI) program. We investigate the effect of both policies on subjective well-being of the elderly. We use panel data from the Korean Longitudinal Study of Aging, with the 2006 data representing the "pretreatment" and the 2008 data the "posttreatment" situations. We use regression methods for purposes of inferring program impacts. Our findings suggest that satisfaction with economic status was slightly improved by LTCI alone, and by LTCI and basic old-age pension in combination, depending on the estimator used. We found no policy impacts on satisfaction with health conditions. The benefits provided by the two programs may be insufficient to raise well-being in the population as a whole; alternatively, the outcomes may have been measured too soon after the policies were implemented.

Impact Evaluation of Legislation in Basic Old-Age Pension Act: Focusing on the Eligibility Conditions and the Graded National Subsidies Ratio

본 연구는 그동안의 연구들과 달리 법 규정 자체에 초점을 두고 입법영향평가를 시도하였다. 구체적으로는 2007년에 경로연금지급대상자가 아니었던 노인이 2008년 기초노령연금 지급대상자가 된 경우를 종속변수로 두고 기초노령연금법상의 지급대상 선정기준과 국가, 지방자치단체 간의 비용부담 규정을 독립변수로 하여 위계적 회귀분석을 실시하였다. 분석결과에 의하면 기초노령연금법상 소득인정액이 선정기준액 이하에 해당할수록 기초노령연금 수급권을 취득하였지만, 광역시 등 기초자치단체 국고 차등보조율 규정은 기초노령연금 수급권 취득에 ‘부수적’ 효과로서의 입법영향을 주었을 가능성을 보이고 있었다. 따라서 본 연구는 기초노령연금법 상 지급대상 선정기준 규정은 입법의 효과성 기준으로 볼때 연금수급권 취득 효과를 달성하였지만, 비용부담 규정은 입법의 ‘부수적’ 효과를 가져왔을 수 있다고 일견 평가할 수 있겠다.

An Analysis on the Anti-poverty Effectiveness of the Basic Old-Age Pension System

An Analysis on the Anti-poverty Effectiveness of the Basic Old-Age Pension System

The Impact of the Basic Old-Age Pension Scheme on Poverty Reduction and Income Guarantee

The Impact of the Basic Old-Age Pension Scheme on Poverty Reduction and Income Guarantee

The Fiscal Impact of the Basic Old-Age Pension System on Local Governments

The Fiscal Impact of the Basic Old-Age Pension System on Local Governments