This study aims at proposing better welfare policies for working poor by evaluating each policies and simulating some scenarios.
We evaluate the Japanese unemployment insurance in terms of poverty rates using the Japan Household Panel Survey (JHPS). The finding is the coverage expansion of the unemployment insurance for non-regular workers with much shorter job durations in 2010 contributed to lower poverty rates. This report also analyzes the impacts of active labor market policies in Denmark; overall the policies tend not to help the unemployed youth exit unemployment. Only subsidized employment and caseworker meetings seem to be effective.
We also consider some scenarios with different coverage and amounts of unemployment benefits, participation benefits from the ALMP, and earned income tax credit(EITC). The simulation results show that EITC is efficient for lowering poverty rates, but unemployment assistance is better for reducing poverty gaps.
For better meeting basic needs of working poor families, benefits in kind need to be considered instead of benefits in cash. Families into poverty tend to reduce the expenditures for foods and education, but cannot reduce the housing costs. Housing benefit is crucial for keeping the inelastic needs, and livelihood benefits and education benefits are also important for avoiding deprivation.
In sum, in the Korean labor market where non-regular employments keep rising, the social protection system for working poor needs improvement by focusing on public assistance and adequate combination of benefits and employment services.