실업급여정책의 효과성에 관한 연구

Abstract

The employment insurance system in Korea supports livelihood security during unemployment by paying unemployment benefits. It also aims to indirectly promote active a job searches among the unemployed by providing less generous unemployment benefits and less benefits for a shorter duration than in advanced countries. This study examines whether the employment insurance system achieves the intended policy goals. The research analyzed the relationships between the duration and amount of unemployment benefits and re-employment rates on the basis of data drawn from the employment insurance database. Four hypotheses are established to find the effect of the duration and amount of unemployment benefits on the re-employment of recipients. Hypothesis 1: Among recipients, women, the aged, and low-educated people are less re-employed as they are in a disadvantageous position in the labor market compared with men, youths, and highly-educated people. Hypothesis 2: The longer the duration of unemployment benefits, the higher the reservation wages of recipients and the longer the job search period. This would lead to a lower re-employment rate and a longer unemployment period. Hypothesis 3: The closer the end of benefit periods comes, the lower the reservation wages and the stronger the job search efforts. This would lead to a higher re-employment rate through a higher unemployment escape rate. Hypothesis 4: The higher the level of unemployment benefits (wage replacement ratio) then the higher the reservation wages of recipients and the longer the job search period. This would lead to a lower re-employment rate and a longer unemployment period. Data needed for the study were gathered from the employment insurance database because information on the amount and duration of unemployment benefits of recipients and wage levels prior to unemployment is contained in it. Data samples were all selected 18 months after the end of the year when the event of the unemployment belongs to in consideration that it takes some time after being unemployed to analyze the re-employment rates of the unemployed. The time period of when the samples were selected was five years from 2002 to 2006, but excluded the year 2007 given the unique situation caused by the financial crisis of that year. Of the total 2,310,000 people who received unemployment benefits during the five-year period, 57,000 or about 2.5% were selected in proportion to the size of each region and mandatory benefit periods. In order to test the first hypothesis, the study conducted a Logit analysis to find out whether there are statistically significant differences between the re-employed and unemployed people with regard to personal characteristics, such as gender, age, occupation, wage level, benefit amount, and corporate information (such as industry and business size). In order to test the second, third, and fourth hypotheses, this study employed the regression and correlation analysis methods to see if benefit durations and wage replacement ratios have a statistically significant influence on re-employment rates. At the same time, this study conducted a survival analysis involving a life table analysis that allows any changes in unemployment escape rates to be easily found. A Logit analysis of what effects the general characteristics of recipients of unemployment benefits on re-employment find that it is statistically significant that men, youths, and the highly educated have advantages in re-employment over women, the aged, and those not highly educated. This result, like the results of other previous studies, supports the first hypothesis. Also examined are the effects of mandatory benefit periods on re-employment through a regression analysis. It was found that the second hypothesis that the longer the duration of unemployment benefits, the lower the re-employment rate that can be accepted in the case of 2002 to 2004. However, it cannot be accepted for the year 2005 and 2006. This study performed a correlation analysis to see if there is a relationship between the benefit duration and unemployment spell of the re-employed. However, the analysis found no statistically significant relationship between them. Therefore, the second hypothesis that, the longer the number of benefit periods then the longer their job search period, which leads to a lower re-employmentrate and longer unemployment period was rejected. However, this conclusion can be applied more certainly to the year 2005 and 2006. In the case of 2002-2004, it is true that the longer the duration of unemployment benefits, the lower the re-employment rate, but it cannot be said that a longer duration prolonged the unemployment period, implying that Hypothesis 2 partially holds true in the case of 2002-2004. Hypothesis 3 is that the closer the end of benefit durations comes, the lower the reservation wages and the stronger the job search efforts of recipients that will lead to a growth in the re-employment rate (the unemployment escape rate)was tested using a survival analysis. As a result, it was found that although the maximum mandatory benefit duration is 8 months, the unemployment escape rate reached its peak 18-22 months after being unemployed. This suggests that there is a gap between the expiry of benefit durations and the time when re-employment starts toactively occur. A regression analysis of the effects of wage replacement ratios on re-employment showed that those having a wage replacement ratio above 50% or below 25% were challenged to find jobs or have many difficulties in finding jobs in 2002 and 2003. In 2004, those having a wage replacement ratio above 50% found it difficult to find jobs and in 2005 those having a wage replacement ratio below 50% or above 75% were hard to find jobs. Since any statistically significant consistency between wage replacement ratios and re-employment rates could not be found, Hypothesis 4 was rejected. In conclusion, the ultimate purpose of the unemployment benefit policy is to support livelihood security and stable job-seeking activities. Given this, the current shorter benefit duration policy achieves the desired effects and prevents prolonged unemployment. However, it still has some problems, such as failing to provide enough support for livelihood security. Therefore, it is necessary to consider measures to extend benefit duration and simplify the current complex payment structure. Positive consideration should also be given to measures to extend the minimum benefit duration of 90 days given the relatively long unemployment spell of short-term benefit recipients. Their unemployment spell is so long compared with the benefit duration that they have great difficulty in maintaining livelihood security while at the same time engaging in stable job-seeking activities during unemployment. Meanwhile, although the level of unemployment benefits should be kept at 50% of wages as of now, the method of setting the upper and lower ceilings requires review. It may be realistically impossible to revise downwards the minimum amount, but the maximum amount limited to 40,000 won calls for review.