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The Peninsula

South Korea’s Basic Income Model Focuses on Local Growth

Published October 20, 2020
Author: Korea View
Category: Current Events

What Happened

  • Universal basic income has gained public support in South Korea as the government attempts to ride out the economic slowdown from COVID-19.
  • Programs spearheaded by local governments that distribute cash to residents for use within the community serve as pilots for a wider proposal.
  • Receiving the most attention, the program in Gyeonggi Province pays a quarterly cash pay-outs to its residents – this program has reportedly led to a 45 percent increase in sales for local businesses.

Implications: Although the Korean government traditionally frames national economic policies as measures to boost export competitiveness, advocates for a nationwide Universal Basic Income (UBI) focus on the proposal’s benefit to local economies. This approach also differs from peer countries like Finland whose UBI pilot measured success based on its impact on employment. Similar to the direct cash payments that Seoul distributed during the height of the coronavirus outbreak, Korea’s UBI proposal promises to boost the domestic consumer market, particularly small and medium-sized businesses. Notably, provincial governments would play a key role in any prospective implementation, giving them greater scope to address issues like the income gap, etc.

ContextUnder the Youth Basic Income program, Gyeonggi Province currently provides 1 million won (USD 900) to 24 year-olds living in the region. According to a survey conducted in July 2019 by the Gyeonggi Research Institute, 80.6 percent of the youth recipients said they were satisfied with the program. Meanwhile, politicians from both sides of the aisle have grown more vocal on the issue of implementing basic income on a national level.

This briefing comes from Korea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receive little attention in the United States. If you would like to sign up, please find the online form here.

Korea View was edited by Yong Kwon with the help of Sophie Joo, Sonia Kim, and Chris Lee. Picture from the flickr account of photostudio81

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