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<p>This study analyzes inequality within low-income households by examining how families select combinations of welfare benefits under South Korea’s National Basic Livelihood Security System (NBLSS). Following its 2015 reform, the NBLSS shifted from a uniform cash transfer to a modular structure composed of Livelihood, Housing, and Education benefits. Rather than viewing welfare participation as a simple yes-or-no condition, the analysis focuses on the configuration of “welfare portfolios” that households actually receive. Using pooled cross-sectional data from the Korea Welfare Panel Study (KOWEPS), a Nested Logit model estimates the probability of selection among seven exclusive benefit combinations. The hierarchical framework reflects the institutional design in which the Livelihood benefit functions as the gateway to more complex support. Results indicate that household composition and life-cycle stage are the dominant predictors of benefit allocation. The presence of children markedly increases the probability of education-related packages, whereas elderly members are concentrated in Livelihood-only arrangements. Educational attainment of the household head, as a proxy for human capital and administrative literacy, raises access to packages including housing support. These outcomes reveal that demographic factors structure how welfare is distributed even among households with comparable income levels. The analysis contributes to understanding intra-poor inequality by illustrating how institutional thresholds and household characteristics interact to shape benefit portfolios. The findings underscore the importance of designing adaptive, demographically sensitive welfare systems in aging societies facing fiscal constraints. This study technically analyzes portfolio choice conditional on program entry and does not assert a causal effect of household characteristics.</p>

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Household sorting and welfare portfolios in South Korea: a nested logit approach

  • 期刊论文

  • 发表日期：

    2026年2月10日

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  • Jun-young Choi

摘要

This study analyzes inequality within low-income households by examining how families select combinations of welfare benefits under South Korea’s National Basic Livelihood Security System (NBLSS). Following its 2015 reform, the NBLSS shifted from a uniform cash transfer to a modular structure composed of Livelihood, Housing, and Education benefits. Rather than viewing welfare participation as a simple yes-or-no condition, the analysis focuses on the configuration of “welfare portfolios” that households actually receive. Using pooled cross-sectional data from the Korea Welfare Panel Study (KOWEPS), a Nested Logit model estimates the probability of selection among seven exclusive benefit combinations. The hierarchical framework reflects the institutional design in which the Livelihood benefit functions as the gateway to more complex support. Results indicate that household composition and life-cycle stage are the dominant predictors of benefit allocation. The presence of children markedly increases the probability of education-related packages, whereas elderly members are concentrated in Livelihood-only arrangements. Educational attainment of the household head, as a proxy for human capital and administrative literacy, raises access to packages including housing support. These outcomes reveal that demographic factors structure how welfare is distributed even among households with comparable income levels. The analysis contributes to understanding intra-poor inequality by illustrating how institutional thresholds and household characteristics interact to shape benefit portfolios. The findings underscore the importance of designing adaptive, demographically sensitive welfare systems in aging societies facing fiscal constraints. This study technically analyzes portfolio choice conditional on program entry and does not assert a causal effect of household characteristics.