The Korean Journal of Economic Studies
Consumption Smoothing Effects of Unemployment Insurance in Korea
Jiwoon Kim Korea Development Institute)Year 2018Vol. 66No. 4
Abstract자산을 활용하여 실직 시에도 일정 수준의 소비를 유지할 수 있기 때문으로 해석된다.초록 2 (타언어)This study estimates the consumption smoothing effects of unemployment insurance in Korea using the Gruber (1997)’s methodology. The empirical analysis shows that when the wage replacement rate is increased by 10%p, the reduction rate of annual consumption for those becoming unemployed is reduced by 3.5%p. This result implies that unemployment insurance contributes to maintaining consumption levels upon unemployment in Korea. The consumption smoothing effects are concentrated on the unemployed over 50 years old and the unemployed with net debts. Whether net debts are held or not is a particularly important factor in determining the magnitude of the consumption smoothing effects in Korea.