Seoul Stepping Stone Income

Seoul Stepping Stone Income is the future

Seoul Metropolitan Government has tried to provide better income security for citizens in need under the increased instability due to a wide range of social changes. Particularly, Seoul Stepping Stone Income aims to support low-income households facing multiple difficulties in a more generous manner; that is, more support would be given depending on the level of household income. As a policy experiment to examine the feasibility and effectiveness of the new system, a pilot project has embarked on time-series experiments since 2022.

Compared to the existing income security system, Seoul Stepping Stone Income relaxes the eligibility for subsidies in order to cover more households. Specifically, it allows for people who earn an income between 30% and 85% of the median income to receive the subsidy, which is excluded by the current system.

In 2022, the first phase of the pilot project began with a treatment group of 500 households and a control group of 1,000 households selected based on a random selection with the same income eligibility. At this phase, the income eligibility is set for people under 50% of the median income. In 2023, the second phase starts with an increased income threshold, up to 85% of the median income. The participants consist of a treatment group of 1,100 households and a control group of 2,200 households.

The amount of subsidy, called Stepping Stone Income, is determined based on the gap between the 85% threshold of the median income and households’ actual income assessed. The treatment group would be given approximately half of the gap on a monthly basis for a three-year period.

Participants volunteerly applied for the project and were selected depending on the income and property criteria previously set with the help of the public finance database. Throughout the process, participants agreed on informed consent regarding their privacy protection and rights as research participants. Participants selected in the project are supposed to take follow-up surveys twice a year until 2026 regarding their labor participation, earning and spending, nutrition intake, life hardships, and mental health status. Project-affiliated experts and academics will assess the results across the board and then look into the viability of new system.