Did Public Transfers Crowd Out Private Transfers in Korea During the Financial Crisis?
利用韩国1995-2003年家庭面板数据，研究发现金融危机期间公共转移支付对私人转移支付存在挤入效应，危机后则转为挤出效应，表明私人转移网络在危机初期发挥了补充作用。
How effective are public transfers in protecting households facing financial crisis-induced negative shocks? Existing studies have not yet carefully considered the inter-relationship between public transfers and the existing private transfer network. In the context of the financial crisis in Korea, this paper investigates the possible crowding-out effect of public transfers on private transfers by explicitly considering the endogenous responses of private transfers against public transfers. By using two Korean household-level panel data sets for the periods of 1995-1998 and 1998-2003, we found a post-crisis, but not pre-crisis crowding-out effect of public transfers; more importantly, a crowding-in effect is observed during the crisis. The results suggest that private transfer networks were strengthened under the initial phase of the financial crisis, which possibly complemented public transfers due to the lack of effective formal safety nets, while public transfers became effective after the crisis, thereby replacing private transfers. Our results suggest that particularly at the initial stage of the crisis, the government could have played an important role in assisting households to weather the negative impacts of the crisis.