An Empirical Simulation for the Relevance of Alternative Systems to Unemployment Insurance in Korea

Using the simulated data set which is based upon the data set merging Economically Active Population Survey(EAPS) and the Supplementary Survey (SS) in 1998-2001, this paper examines the relevance of alternative programs Unemployment Insurance Savings Account (UISA) and Pension-funded Unemployment Benefit (PUB) - to unemployment insurance system in Korea. Estimating the relative size of unemployment benefit and IA balance under a specific type of UISA or PUB by simulation, this paper yields the two main results. First, replacing UI by UISA with the same benefit being maintained would be beneficial in terms of search efficiency in general, although its effectiveness is a little doubtful as for the non-regular workers. Second, the PUB is better than UISA as an alternative to UI, and also works relatively well even for the non-regular workers.