This study analyzes the impact of the comprehensive changes in unemployment insurance policies on the labor market and social welfare based on the overlapping generation model, which appropriately reflects both the details of Korean unemployment insurance system and the heterogeneity of the unemployed in Korea. First, the empirical analysis shows that a 10%p increase in the wage replacement rate reduces the fall in the annual consumption by 4.0%p. The consumption smoothing effect of unemployment insurance was concentrated on the unemployed over 50 years old and the unemployed with net debts. This empirical result suggests that it is necessary to explicitly consider the heterogeneity of the unemployed in terms of both age and net assets when analyzing the effects of the unemployment insurance system. Second, we examines the effect of the comprehensive changes in unemployment insurance policies by using the calibrated overlapping generation model. The comprehensive policy changes, including strengthening contribution requirements, reducing lower limits of benefits, raising upper limits of benefits, increasing wage replacement rates, and extending maximum benefit durations, decrease the employment rate of the 20~64 age group by 0.06%p and reduce the overall social welfare. The decrease in social welfare was mainly caused by lowering the lower limit of benefits. As a way to improve the social welfare, the upper limit should be increased to 50,000 won and the maximum benefit duration should be extended by one month while maintaining the contribution requirement, the lower limit, and the wage replacement rate to the current level.

Preface
Executive Summary

Chapter 1 Introduction

Chapter 2 Overview of Korea’s Unemployment Benefit System
　Section 1 Introduction of the Unemployment Benefit System
　Section 2 Expansion Process of the Unemployment Benefit System
　Section 3 Current Status of the Unemployment Benefit System
　Section 4 Amendments to the Employment Insurance Act in 2016

Chapter 3 Literature Review
　Section 1 International Literature Review
　Section 2 Domestic Literature Review
　Section 3 Differences Between This Study and Previous Research

Chapter 4 Empirical Analysis of Consumption Smoothing Effects
　Section 1 Data for Analysis
　Section 2 Empirical Methodology
　Section 3 Empirical Results

Chapter 5 Analysis Using the Overlapping Generations Model with the Unemployment Benefit System
　Section 1 Design of the Overlapping Generations Model
　Section 2 Model Calibration
　Section 3 Analysis of the Model Economy in Steady-State Equilibrium
　Section 4 Policy Experiments
　Section 5 Limitations of the Model

Chapter 6 Summary and Conclusion

References
Appendix
ABSTRACT