• KDI Journal of Economic Policy
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• v.29 no.3
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• pp.29-73
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• 2007

This paper evaluates the effects of the Basic Subsidy Program provided to families with infants cared for in private day care centers. There has been a discrepancy in the price and quality level between public and private day care centers. Public day care centers which receive government support in their labor costs are able to maintain relatively higher quality at lower price than their private counterparts, while the majority of children are cared for at private day care centers. To reduce the gap of the price and quality of care between public and private day care centers by improving the quality and decreasing the price of private day care centers, the Basic Subsidy Program was introduced in 2006 to the private day care centers. The subsidies mainly aim to improve the quality and the accessibility of child care, and encourage mothers' labor supply. For this purpose, the provision of the Basic Subsidy Program imposed prerequisites to the care providers including minimum wage and four major insurances for teachers, and child-staff ratio. I examine whether the subsidies improve the quality of care, help mothers balancing work and family, and increase satisfaction with child care from mothers' perspective. Since the outcome variables that measure the quality of care are difficult to obtain, I instead use the input variables for quality production. Child-staff ratio, teachers' welfare, and care environment are considered. The relationship between these variables and the introduction of subsidies is examined. The 2004 National Survey of Child Care and Education and the 2004 National Survey of Day Care Centers are used for the base data set. To reflect the outcomes after the Basic Subsidy Program, equivalent data sets for households and care providers are constructed by the KDI Data Analysis Unit. Using these nationally representative data sets, information regarding child care is collected. The findings show that the subsidies contribute to the quality of care improving the input variables of quality production. The welfare of teachers is improved, and the child-staff ratio significantly decreases. As a result, the usage of private day care centers greatly increases even though the price level rarely changes. However, mothers' satisfaction with child care are rarely affected by the subsidies. Although the subsidies with no eligibility criteria enlarge the recipients, the actual effects to increase maternal labor supply or to improve satisfaction is limited. Given this findings, I suggest some modifications of subsidies to raise the effectiveness of the subsidy program.

• KDI Journal of Economic Policy
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• v.33 no.2
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• pp.111-143
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• 2011

As the 'jobless growth' is developing into a worldwide phenomenon, many countries try to recover a virtuous relationship between the growth and employment using various wage subsidy programs. This study focuses on wage subsidy to employers, labor demand-side wage subsidy for which one can think of two types-a tax credit(a flat wage subsidy) and a social insurance premium exemption(a proportional wage subsidy). For job creation, Korean government reintroduced a tax credit to small and medium-sized enterprises(SMEs) which have increased their employment level in 2010. But many experts has continuously insisted that it should be replaced with a social insurance premium exemption arguing only a few SMEs benefit from the tax credit as most of them are actually not paying any corporate or general income tax bills. However, as the insurance premium exemption accompanies an increase in the amount of budget with the coverage widen, one cannot confirm its cost effectiveness over the tax credit. This paper aims to provide a theoretical analysis to derive some formal conditions under which a social insurance premium exemption creates more jobs than a tax credit does given a budget constraint. We show that the former's dominance over the latter depends on whether there exists a dead zone of social insurance or not. If there does not exist a dead zone, a social insurance premium exemption is more desirable in many cases, whereas one cannot guarantees its dominance over a tax credit if there exists a dead zone. Therefore in order to realize its dominance, the government should minimize a dead zone so that most SMEs effectively benefit from the insurance premium exemption. In addition, applying discriminative exemption rates which reflect each firm's job conditions such as wage level and labor demand/supply sensitivity, the government try to enhance job creation effect.

• 한국신재생에너지학회:학술대회논문집
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• 2010.11a
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• pp.144-144
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• 2010

Reasonable usage methods of energy resources, which are limited for human beings to use, consists of new & renewable energy (NRE) and demand side management (DSM). All technologies and policies for energy resources are classified into two fields, methods for using new energy resources and methods for using conventional fuel energy resources. Various development activities for these fileds have been implemented and various subsidy programs have been operated to penetrate into markets rapidly. These subsidy programs have various types of subsidy by energy resources and programs and the budget are funded by government, which is called Electric Power Industry Basis Fund and is managed considering technology level, economic analysis, global environment, etc. These subsidy programs are managed by Korea Energy Management Corporation (KEMCO) for NRE and by Korea Electric Power Corporation (KEPCO) for DSM, the management are different among two corporations because the purposes and features of establishment are different though these are all public organization. KEMCO is managing the NRE subsidy programs according to the government will, while the management of KEPCO subjects to power system operations though the government will for DSM is considered. NRE which is on the initial phase of diffusion would not affect on power system seriously but the affects could be grown when the diffusion and importance are expanded. Hence some integrated affection analyses considering NRE and DSM are required and this paper shows the concept of integrated operation strategies with ground source heat pump systems which are related with two fields simultaneously.

• Journal of Labour Economics
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• v.43 no.2
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• pp.135-159
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• 2020

This paper analyzes and compares the effects of various government subsidies to improve labor productivity. Laborers are differentiated in learning ability, and duopsonists in the labor market sequentially determine the quality levels and wages of employed laborers in a two-stage noncooperative game under perfect information. If a subsidy is given to the advanced firm in quality and productivity of labor, that firm will prefer to intensify wage competition due to strengthening its competitiveness in the labor market, and attempt to lower its quality in order to reduce the degree of differentiation in quality. At that time, the other firm wants to avoid competition because of its weakened competitiveness, and may have an incentive to lower the quality level to expand the differentiation. If the government subsidizes low-quality and low-productivity firm, it is motivated to increase its quality level to reduce differentiation due to the strengthening of competitiveness, and its competitor has an incentive to improve the quality to expand the differentiation. And there is no significant difference in whether payments are made to laborers or firms.

• Environmental and Resource Economics Review
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• v.33 no.1
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• pp.33-57
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• 2024

This study analyzes the purchase subsidy for electric light-duty vehicles in terms of environmental benefits and total cost of ownership(TCO). For the environmental benefits, we considered the emissions from the power generation mix and reflected the change in efficiency of electric vehicles according to the temperature distribution. The environmental benefits of driving electric vehicles were estimated to be between KRW 2.2 million and KRW 5.3 million. Also, the TCO of electric vehicles compared to diesel vehicles under the current purchase subsidy was estimated to be about KRW 3.6 million lower for business use and about KRW 6.6 million lower for non-business use. These results imply that it is reasonable to lower the unit price of the purchase subsidy even within the same budget. Moreover, the remaining budget could be better spent on upgrading the charging infrastructure, which would reduce the inconvenience of charging for potential buyers.

• IE interfaces
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• v.2 no.1
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• pp.23-27
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• 1989

The problem of planning national coal production is formulated as an optimal control problem. The model can be used to propose a proper government subsidy policy which will enhance the utilization of a nationally-owned resurce(coal) and maintain the optimal level of coal production.

• Proceedings of the KIEE Conference
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• 2003.07a
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• pp.661-663
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• 2003

Electric generation cost in district Heating CHP system has close relationship with the level of heating price. So far, the calculation of CHP generation cost has been based on cost recovery system in which revenue requirement deducted the revenue from heating-sales. The restructuring of electricity industry determines the market-clearing price every hour and made it impossible that the loss due to the above market cost can be attributed to the generation cost. Hence, the loss is compensated by energy subsidy program in public benefit charge. This analysis derives an efficient action plan for future subsidy program.

• Journal of the Korea Society of Computer and Information
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• v.10 no.6 s.38
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• pp.287-298
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• 2005

In this local self-government era, in order to achieve real local decentralization, it is guaranteed to establish self-finances of certain administration level. Nowadays Local equalization scheme is carried out for insuring regional equal development and efficiency and effectiveness of administration and for solving vertical horizontal problem of unequal finance in local government. Local equalization scheme is the system to guarantee the financial source so that all local self-governing organizations can obtain national minimum standard while correcting the unbalance of finance and maldistribution of tax revenue source between regions. This paper presents the directions of improvement so that national subsidy and local tax can contribute to the finance balance of local self-governing organization in the uncertainties of future finance with weak financial ability. Consequently, it is required to operate the system according to balance principle by adjusting the operation form and distribution type such as national subsidy and local tax.

• Journal of Korean Society of Forest Science
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• v.110 no.3
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• pp.453-461
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• 2021

The energy use of forest biomass is crucial to deal with climate change and achieve the carbon-neutral goal. This study aims to analyze the economic feasibility of forest biomass thermal energy facilities and calculate the optimal subsidy level of heat supply to ensure continued operation of the facilities. To achieve this aim, the net present value approach (NPV) and call option price model are adopted considering wood chip price volatilities. The Forest Energy Self-Sufficient Village Project financed by Korea Forest Service is considered as the research case study. In our analysis, when 50% of the initial investment is given to the subsidies and RECs are applied to only power generation, NPV and IRR are both negative and the investment value using the real option model is also zero. We concluded that some heat subsidies should be acknowledged to keep the facilities operating. Besides, the simulation results reveal reliable economic values when the heating subsidy is priced at KRW 0.0248 per kcal.

• Journal of Labour Economics
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• v.43 no.4
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• pp.143-177
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• 2020

This paper investigates how the provision of full child care subsidy to infants and toddlers differently affected female labor supply and fertility rate depending on the level of supply of child care centers in the place of residence. Our results on labor supply show that the higher the supply rate of childcare centers in residential areas, the higher the probability of career maintenance for multi-child mothers who are more likely to be admitted to a childcare facility. The results on the fertility rate show that the first child's fertility rate has increased since the support of childcare expenses in areas with higher rates of childcare centers. In the places where the supply rate of publicly-funded childcare centers is high, the second child's fertility rate has also increased significantly since the support of childcare expenses. This suggests that the quality of child care is an essential factor in determining the birth rate. Our results suggest that the effects of child care support on women's labor supply and fertility rate may differ depending on the priority of entering child care centers according to birth order and the degree of quantitative and qualitative supply of child care centers in the place of residence.