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Assessing the Impact of a Safety Income Model as an Alternative Approach to Universal Basic Income: A Case Study in South Korea
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  • Ki Seong Park,
  • Gyeong Lyeob Cho,
  • Yong Min Kim,
  • Heikki Hiilamo
Ki Seong Park

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Gyeong Lyeob Cho
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Yong Min Kim
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Heikki Hiilamo
Sungshin Women's University

Corresponding Author:[email protected]

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Abstract

In the past decade, the Universal Basic Income (UBI) concept has gained significant traction as a potential remedy for poverty and inequality. However, the practical implications of UBI implementation remain under extensive debate. This study shifts its focus towards an alternative minimum-security model, the Safety Income (SI) Model, representing a nuanced departure from both established policies and UBI. SI is a welfare system that supplements households earning below the standard median income with 50 percent of the difference between the standard median and their current earnings. The study presents the set-up of SI and assesses the cost of its implementation in South Korea. Employing a computable general equilibrium model, the study analyze the impacts of SI, UBI, and the existing scheme in South Korea on income disparities, labor market outcomes, and Gross Domestic Product. Our analyses demonstrate that SI outperforms the other two welfare systems across all economic indicators. This research contributes to the discourse surrounding economic security, poverty alleviation, and inclusive social policies.