• Journal of Labour Economics
• /
• v.42 no.2
• /
• pp.1-35
• /
• 2019

This paper compares the effects of income transfer and wage subsidy in a simple general equilibrium model. The redistributive effects of both policies are smaller, the more intensive in low wage workers are the luxury goods production. Wage subsidy contributes more to employment and GDP relative to income subsidy, but its redistributive effects can be smaller depending on the elasticities of labor demand supply. More complete empirical analysis appears due on the effects of both policies in order to design an optimal mix of efficiency and equity.

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

• Korean Journal of Social Welfare
• /
• v.58 no.3
• /
• pp.81-107
• /
• 2006

This study begins with the assumption that the existing impact analysis studies did not present determinate criteria on which the studies were based. After we criticized the limitations of existing studies, we presented goal-based criteria and evaluated the long-term job-seekers subsidy as a case. This evaluation study is of micro-effect analysis which focuses on the effects on subsidized employees and employers. The Findings are: The subsidized employees were appropriately selected and can be taken as having difficulties in the labour market. The employment effect of the subsidy was significantly positive, though the wage effect was significantly negative. The effect of maintaining of skill measured by occupational mobility was positive, but not significant. The effect of increasing the quantity of employments in the subsidized companies were found significant. It could be proposed from the findings that the wage subsidy for the frail labour force is so effective as the subsidy for the employed labour force and could be boosted.

• Journal of the Korean Regional Science Association
• /
• v.9 no.2
• /
• pp.59-69
• /
• 1993

This paper empirically analyzes economic impacts of policy instruments and suggests policy alternations to improve the urban poor's alternatioes to improve the urban poor's standard of living in Korea. By estimating a joint decsim model of hours of work and housing demand utilizing a sample of 270 urban poor housholds, the study finds that the efects of policies dre diverse. The dncome subsidy to msst effectwe in increasing comsumption while the wage increase is least likely to decrease hours of work. Policy suggection are firstly that policies to ward the urban poor should hot be overlapping or contradictory, and secondly that the policies should be able to increase the poor's wage earning abiliby.

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

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

• Journal of Korean Society of Transportation
• /
• v.24 no.1 s.87
• /
• pp.59-72
• /
• 2006

In spite of continuous implementation of the transportation demand management (TDM), the profuse use of car at the peak-time has caused chronic traffic congestion in the Seoul downtown area. This study makes a comparative analysis on the effectiveness of commuting cost subsidy system for public transit user with other policy instruments such as an increment in fuel tax and park cost. This study not only follows standard guidelines of stated preference methodology to guarantee objectivity, but also uses sample enumeration method and non-Parametric bootstrapping method to secure reliability of empirical results. As a result of empirical studies, the conversion effect of car to public transit is superior to other two Policy instruments. Also. an increment in fuel tax and park cost is income-regressive from the equity aspect in a wage bracket, but commuting cost subsidy system for Public transit user is Income-progressive As a fundamental research on commuting cost subsidy system for public transit user, this study is likely to Provide Policy-makers with quantitative information useful in establishing Public transport Policy to Promote the use of the public transit.

• Korea journal of population studies
• /
• v.21 no.2
• /
• pp.58-82
• /
• 1998

It is usually proposed that job security of old age workers is hampered by the structure of wage increasing with age. This paper sets forth a model to comprehend the characteristic of the old age workers' labor market and policy implications derived from it. In order to stimulate demand for old age workers, policy initiatives should be taken as follows : the wage criteria should be simplified which apply differently from one institution to other; incentives relatively favorable for employing old age workers' in manufacturing sector should be also given to service sectors; employment subsidy or other tax incentives should be given for labor contract after the retirement age; licensing and evaluation system for job ability should be introduced based on occupation & job analysis. To lower the reservation wage of workers, mortgage loan for house and long-term low interest loan for tuition fees should be developed together with stabilization of housing cost. Wedding culture which requires high expense should be amended. Above all, it is necessary to install reasonable social security system. Policy orientation should also pay attention to reduce labor supply of the old aged via aiding old age workers' firm opening and voluntary civil service together with developing various honor programs for members of civil corps.

• Journal of the Korea Safety Management & Science
• /
• v.8 no.1
• /
• pp.165-179
• /
• 2006

Flextime system labor problem appeared by social issue going through a late 97s economic crisis. The most important thing among gravity is that act for factor who do to magnify gulf between rich and poor because do so that may polarize labor market at central part and neighborhood and makes preservation of society integration hardly social economy enemy of flextime system worker's spread. Furthermore, new economy surrounding has attribute that deepen uncertainty social bipolarization according as order by 21th century information-oriented society, globalization, knowledge base economy. Therefore, role of the country that control spread of flextime system in fixed level is more important first of all and application of employment insurance may do that have important meaning and social deliquescence.

• Journal of Labour Economics
• /
• v.39 no.4
• /
• pp.1-29
• /
• 2016

This study examines the effects of the "youth unemployment bonus" program implemented in 2004. We view this program through the lenz of search-matching models and apply a quasi-experimental approach to an administrative unemployment insurance database of Korea. This episode is particularly useful because the program aims at long-term unemployed youths and the size of public assistance is large enough to subsidize employers for a year with a monthly subsidy of about $600. The main effects are found to be as follows: (i) the search period gets shortened by 18 days, (ii) the subsequent wage has increased by about three percents, and (iii) a conservative benefit-cost analysis reveals the validity of this program. We interpret these results in the context of general equilibrium models.