Comparative Analysis of Policy Models and Financial Sustainability for Establishing a Foreign Workers' Mutual Aid Fund : Focusing on the Feasibility of the ‘Separate Fund Model’

Key Points

• The research aims to identify the optimal policy model to address the contribution-compensation mismatch in South Korea's foreign workers' social security system and verify its financial feasibility.
• Categorized global policy models into three archetypes: Japan (reimbursement), Germany (linkage), and Malaysia (accumulation).
• Conducted comparative analysis of these models in relation to foreign workers in South Korea.
• Performed a 30-year financial projection using a balanced income-expenditure model under conservative assumptions.
• Identified Malaysia's separate fund model as the optimal alternative for South Korea's mutual aid fund.
• Projected fund accumulation of approximately 5.4 trillion won in year 10 and 27.0 trillion won in year 30 under a 3% return assumption.
• Established that the fund could serve as a fiscal buffer to absorb social costs related to migrant workers.

Abstract