Policy Effectiveness Analysis of the Korean Senior Employment and Social Activity Support Program (SESAP): Focusing on the Senior Internship Program

Abstract

The Senior Employment and Social Activity Support Program (SESAP) has been promoted as a policy to realize old-age income security, social participation in old age, and active aging by creating jobs and providing opportunities for the elderly aged 65 (or 60 or older) to participate in economic and social activities by investing state financing. As SESAP has been expanded over the past two decades, social interest has increased in the appropriateness, feasibility, and sustainability of the government-funded job policies on SESAP. This paper uses cost-benefit analysis to examine the economic effects of SESAP, especially focusing on the Senior Internship Program. As a result of the cost-benefit analysis, we obtain the benefit-cost ratio of 3.39 for the Senior Internship Program (3.45 if the healthcare savings are included). In other words, the Senior Internship Program generates more benefits than the financial costs and is therefore considered to have a policy and economic feasibility. The findings suggest that SESAP is effective in increasing income, improving health, and reducing socio-economic costs (including healthcare costs). Considering Korea’s situation, which is experiencing a rapidly aging population and a lack of a public old-age income security system, the SESAP is significant as a multi-player policy that can respond to the "four hardships" of old age–poverty, no one to rely on, loneliness, and illness. Therefore, SESAP needs to be continually expanded and promoted as a social safety net for the elderly, and it is necessary to verify the effectiveness of SESAP from various perspectives.