The Effects of Changes in National Basic Livelihood Security System using Simulation Model

Abstract

This study developed a simulation model for analyzing the effects of changes in National Basic Livelihood Security System. This study improved previous simulation models by applying the family support obligation rule and by considering potential non-take up behaviors. The model applied the NBLS rules on national representative survey data and artificially generated the NBLS take-up status and the amount of benefits. Take-up rates and poverty were calculated to evaluate the redistributive effects of changes in NBLS System. Several scenarios were simulated to assess the impacts of recently proposed NBLS reform plans. The results show that abolishing the family support obligation rule, raising the Standard Median Income, adjusting the concept of household, increasing the the cut-off line for an assessment of entitlement, expanding the earned income credit, relaxing the asset test rules enhance the generosity of NBLS System and reduce poverty.