The Korea Local Administration Review

This study aims to analyze the poverty reduction effect and efficiency of an increase in the stipend of the senior job program according to the government's plan. The basis for this analysis is ‘Living Profiles and Welfare Service Needs of Older Persons in Korea, 2017’ and the ‘Household Income and Expenditure, 2016’ database. The results show that, initially, the poverty rate appears to be 68.9% and it appears that individuals fall below the poverty line by 367,000 won. Subsequently, the poverty rate reduction effectiveness appears to be only 6.0% and the change in the poverty gap is just 38,000 won because of the high vertical expenditure efficiency and poverty reduction efficiency. Furthermore, the higher the stipend, the higher is the poverty reduction effectiveness. Although the increase doubles the current payment, 4 out of 10 people are still classified as poor and the poverty gap appears to be 160,000 won. Moreover, the poverty rate of the aged population drops from 47.2% to 45.5%, while the change in the poverty gap is just 14,000 won. However, the government expenditure for this program has been increased by more than 2.5 to 5 times that of the current expenditure. Although the program reduces poverty, it is not enough to alleviate poverty only through an increase in the stipend. The senior job program is neither income maintenance policy nor the public assistance. Especially, the civic service program should avoid setting poverty reduction as its primary goal but should expand opportunities for the low-income aged population to participate in social activities.

□ Keywords: Senior Job Program, Elderly Poverty, Poverty Reduction Effect, Horizontal Expenditure Efficiency, Vertical Expenditure Efficiency, Poverty Reduction Efficiency