Second-Year Results of the Seoul Stepping Stone Income: 8.6% Welfare Exit Rate, 31.1% Households Rise in Earned Income, and 1.9 %pt. Gain in Work Promotion Effect

Second-Year Results of the Seoul Stepping Stone Income: 8.6% Welfare Exit Rate, 31.1% Households Rise in Earned Income, and 1.9 %pt. Gain in Work Promotion Effect

Seoul Metropolitan Government
Yunseo Lee
+82-2-2133-8435
Yunseo26@seoul.go.kr

The Seoul Metropolitan Government announced second-year results of Seoul Stepping Stone Income (formerly known as Safety Income), a K-welfare model introduced by Seoul Mayor Oh Se-hoon, at the Seoul International Forum on Stepping Stone Income 2024, held at Art Hall 2 of the Dongdaemun Design Plaza (DDP) on Monday, October 7. The findings show that the group receiving Stepping Stone Income over the past two years displayed positive signs, including increased work participation and the productive use of benefits, compared to existing programs.

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Seoul International Forum on Stepping Stone Income 2024 discussed the second-year result of the Stepping Stone Income, which indicated some positive outcomes for the recipients (photo: Seoul Metropolitan Government)

The third annual "Seoul International Forum on Stepping Stone Income 2024" took place under the theme "Shifting the Income Security Paradigm: Solutions for Alleviating Poverty and Income Disparity." Experts on inequality from nations leading the research field like the U.S. and France gathered for a keynote speech and a special discussion across three sessions. The main session focused on highlighting and discussing the second-year results of the Seoul Stepping Stone Income Project.

Notably, the second-year results include an analysis of participants in both the first phase (below 50% of the median income) and the second phase (below 85% of the median income). With more participants and a longer study period, the reliability of the experiment has increased, allowing for a more detailed examination of its potential for national institutionalization.

A total of 2,076 households have been supported for 3 years
(Control group: 3,527 households / Phase 3 does not have a control group)

• Phase 1 (July 2022 – June 2025, 3 years): 50% of standard median income (less than 326 million KRW of property), 484 households
• Phase 2 (July 2023 – June 2025, 2 years): 85% of standard median income (less than 326 million KRW of property), 1,100 households
• Phase 3 (April 2024 – March 2025, 1 year): 50% of standard median income (less than 326 million KRW of property), 492 households

Higher welfare exit rate and work motivation effect compared to existing systems

Of the participating households, 132 households (8.6%) saw their income increase to over 85% of the median income. This represents a 3.8 percentage point increase from the previous year, which is a 4.8 percentage point (23 households), reaffirming that the welfare benefit exit rate of Seoul Stepping Stone Income participants is higher than the existing system, as seen last year. In addition, Stepping Stone Income mitigated the shortcomings of the current system, which has a weak work incentive effect. 476 households (31.1%) saw an increase in earned income, representing a 9.3%pt. increase from 104 households (21.8%) in the previous year.

Use of Stepping Stone Income for Caregiving, Education, and Other Productive Activities

Participants of the program were found to have utilized Stepping Stone Income according to their circumstances. Households with elderly members or young children used the increased income to reduce their working hours and devote more time to caregiving. As evidence of human capital investment shows, education and training expenditures were 72.7% higher than the control group.

Increased asset formation

The amount of savings among recipients of Stepping Stone Income was 11.1% higher compared to the control group, indicating that recipients were preparing for the future through asset formation. Also, as with the previous year, the positive effects of Stepping Stone Income on essential goods consumption and mental health were confirmed again this year.

More information can be found on the Seoul Metropolitan Government’s official YouTube channel (www.youtube.com/seoullive) and the forum website (www.sifsi.org).

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