The 'Durunuri' Program — One Cannot Be Full With the First Spoonful

[Hankook Ilbo · November 26, 2012]

Yun Suk-myung, Research Fellow at the Korea Institute for Health and Social Affairs (KIHASA)

The 'Durunuri Social Insurance' support program, which subsidizes a portion of employment insurance and the National Pension contributions for low-income workers, is entering its fifth month since introduction. As the program requires 260 billion won this year alone, questions regarding its effectiveness are already being raised. The scope of these concerns is broad, ranging from the originally intended policy effect of eliminating coverage gaps in social insurance to the lack of support for low-income self-employed individuals and other vulnerable groups, as well as the reason why the National Health Insurance is not included. In the midst of such controversy, what criteria can be used to objectively evaluate the 'Durunuri' program?

Low growth and jobless growth, high youth unemployment rates, an increase in non-regular workers, the mass production of low-income occupations and deepening income polarization, the slowing of economic vitality due to low fertility and an aging society, and the increasing burden of supporting the older population, and escalating conflicts between generations and classes caused by such problems: not only the present but also the society to come is filled with prospects even gloomier than today's.

In this situation, priority should be given to policies that can reduce the burden on future generations in a low-fertility and aging society by providing incentives for individuals to prepare for their present and future through their own efforts. In other words, it is time for policies that can function as a mechanism to minimize social conflicts that erupt from a lack of hope and dissatisfaction with reality.

One of the policies that can be expected to have a positive effect on these requirements is the 'Durunuri Social Insurance' support program, which provides contribution subsidies to low-income groups. This is because it can contribute to resolving the anxiety over unemployment and old age for low-income workers while easing the social insurance burden on employers and low-income workers.

Even if the intended results of the program do not appear in the short term, it has the effect of supporting the income of low-income groups in terms of resolving the ever-deepening income polarization. Regarding the point that the effect of eliminating coverage gaps in social insurance is small and there are concerns about the policy's deadweight loss, this will be a superior policy alternative to 'blind welfare expansion' in that it provides contribution support to those who work hard.

Even if one acknowledges the purpose and timeliness of introducing such a system, there are many obstacles that make it difficult for the 'Durunuri Social Insurance' support program to take root in a short period.

Representative examples include the difficulty of identifying appropriate recipients due to insufficient income identification infrastructure and the decrease in policy effectiveness caused by a lack of understanding of the system. Despite these concerns, looking at the development process of social insurance in our country, the success of the 'Durunuri Social Insurance' support program is not bleak. This is because we were once a country where, only about ten years ago, the perception that 'the National Pension is a system for fools to join' was prevalent due to the mistaken belief that one would not receive the National Pension even after paying contributions. The remarkably changed perceptions regarding the National Pension in recent years provide the background for viewing the 'Durunuri Social Insurance' support program optimistically from a long-term perspective.

To successfully establish the 'Durunuri Social Insurance' support program, it seems necessary to improve the perceptions of employers and workers regarding the system, ease the administrative burden on employers, and expand the application of the system to low-income self-employed individuals and other low-income workers in terms of equity.

In particular, side effects caused by the lack of income identification infrastructure could be the greatest obstacle. However, from a future-oriented perspective, this does not seem to be a matter of great concern. This is because a significant portion of the problems related to income identification is linked to the issue of advancing our society. If advancement proceeds effectively in each field, the problems being raised will be resolved automatically. Furthermore, only then will it be possible to build an advanced and equitable society in the true sense.

It is not easy for a perfect policy to exist. However, if the best is difficult, I believe constant effort is needed for the second-best and third-best policies. Systems that can make one full with the first spoonful are rare. As long as the purpose of the program's implementation is clear, it is time for all of us to pool our wisdom and focus on preparing measures to minimize the side effects of the 'Durunuri Social Insurance' support program.

Source: Hankook Ilbo (original article)