The Impact of Settlement Support Programs in South Korea on the Economic Adjustment of North Korean Refugees

Since 1962, the South Korean government has administered the settlement support program targeting North Korean (NK) refugees who came from North Korea to South Korea. This program provides temporary cash transfer and in-kind benefits to give a grace period for NK refugees. This settlement support program has changed to pro-work caused by the abrupt increase of the entry number of NK refugees since the mid-1990s and a high rate of welfare receipt of NK refugees: by mid-2000s over 60 percentages of NK refugees has remained in a public assistance program for low-income families in South Korea. Currently, over 30,305 NK refugees are living in South Korea, and a participation rate of a primary public assistance program has decreased to 24.4%. However, it is still 7.6 times higher than that of nationwide, 3.2% as of June 2017 (Ministry of Unification, 2017).

This study evaluates effects of 1) the 2006 reform of settlement support programs for NK refugees on their economic and behavioral outcomes -- earned income, cash transfer, employed duration, and security level of employment -- and how the effects differ by working ability. 304 NK refugee samples from 2010 National Survey of DomesticViolence data and 156 NK female refugee samples from the 2012 Customized Support Plan for Victimized NK Female Refugees data, funded by the Korean Ministry of Gender Equality and Family, will be analyzed. To examine the 2006 reform effect, samples in those datasets were divided by the 2002 to 2005 entry group and the 2006 to 2009 entry group, and regression analysis was performed. To compare the effects by working ability, samples in those datasets were classified into a group whose employment is relatively harder (i.e., seniors and females with children) and the other group whose work is relatively easier; and the multi-group analysis was carried out.

Preliminary results show that the 2006 settlement support program reform increases the earned income (+60.64 man-won, p<0.5) decreases cash transfers from government (-28.42 man-won, p<0.5), increased job duration (20 months, p<0.1), and increased employment (+52.47 percentage point, p<0.01). If limiting samples to groups who cannot find jobs easily (women in their 20s and 30s with children and women over 60), these effects disappear. If restricting samples to groups who can find jobs easily (women in their 20s and 30s without children, women in their 40s and 50s), increases in the earned income (+63.67 man-won, p<0.1) and decreases in cash transfer (-26.63 man-won, p<0.5) are found.

These results suggest that 2006 settlement support programs reform may increase outcomes related to self-help but decrease the government support and that a group who can be employed harder gets disadvantages from the pro-work reform and careful consideration is required for involuntarily unemployed NK refugees.