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Generally, as an increase in the level of public pension benefits, welfare finance is worse in the short term but welfare funds using basic old-age pension etc. are decrease through poverty reduction for the aged in the long term. This imply that the relationship between income security and welfare finance has good function. The purpose of this study is to assess the relationship between income security and welfare finance by simulation method.
The major results are as follow. Ultimately, income security reduce total welfare finance through the reduction of the financial burden using basic old-age pension etc. However the effects depends on the size of public pension dead zone. The results shows that in order to maximize the reduction of total welfare finance, it is necessary to reduce the size of public pension dead zone for low-income scale. Also, long-term perspective, income security policy through the expansion of public pension(Nationa Pension Scheme) is positive in terms of both workfare and accumulation of old-age income.