Assessing the Impact of a Safety Income Model as an Alternative Approach
to Universal Basic Income: A Case Study in South Korea
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.