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Cash and In-Kind Benefits as Composing the Social Security Program and Their Effects

Cash and In-Kind Benefits as Composing the Social Security Program and Their Effects

  • Author

    Lee, Hyon Joo

  • Publication Date

    0000

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  • Series No.

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This study examines the composition of social security programs in terms cash and in-kind benefits and analyzes the effects of the two type of benefits. Through such analyses, this study aims to provide the basic information necessary for a comprehensive design of social security system focusing benefit types. To analyze the composition of social security policy in terms of cash and in-kind benefits, we look at public social spending using OECD SOCX and public social spending on education. Korea is generally thought to have spent more on in-kind benefits than on cash transfers, but this is a kind of illusion caused by a high proportion of expenditure for medical service among low total public social expenditures. The international comparison shows that the difference between in-kind benefits is smaller than are difference between cash benefits across the countries. Our examination of changes in cash and in-kind benefit programs in selected welfare states find that these countries have experienced a transition from public assistance-type cash support to a universal in-kind support (housing, education, child care, etc.). After a certain point, the difference among the policies selected by various countries becomes apparent. The selection of cash or in-kind income varied based on the social values, the differences of composition of cash and in-kind programs also led to difference in outcomes. With a focus on family policy (child welfare), which is the subject of the most intense value arguments, the mix with cash and in-kind benefits correspond to policy stances based on social values of the countries and that these resulted in differences in outcomes such as child poverty, birth rate, and employment of women. An assessment of the effects of cash and in-kind support suggests that low life satisfaction was meaningfully correlated with high household burden in areas related to basic needs low housing quality. The adjusted disposable income poverty rates after housing, medical, and educational costs are worse than disposable income in Korea and the gaps are bigger than it in other welfare state. Our projection showed that increased cash support would result poverty rate by 0.77%p, while increased in-kind support led to a 0.96%p-decrease in the poverty rate. Based on current government’s plan, the alleviation of poverty and inequality through in-kind support (housing, medical care, child/senior care, etc.) is estimated to be higher than the effect of cash support. Based on comparative analysis of social expenditure of the welfare states they show high level of life expectation, Korea must reinforce more in-kind support for seniors, both cash and in-kind support for people with disabilities, and cash support for families.  

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