The Introduction of Social Service E-Vouchers and Changes to the Structure of the Mother-Infant Help Service Market

Recently, interest in social services has been rapidly increasing in South Korea because of an aging population, nuclear families, an increase in female participation in the workforce, and other demographic and social structural changes. Demands for social services have been rising rapidly as a result of these changes, and government spending will likely increase to meet these demands. It is therefore imperative to review government institutions to ensure transparency and efficiency in social service investments and spending and to establish improvement measures. The South Korean government introduced e-voucher programs for delivering social services in 2007 to meet increasing demand for welfare services in step with socio-economic changes. The Social Service e-Voucher Program issues purchasing cards to social service recipients, who then have the option of choosing service providers. Generally, e-vouchers come in the form of cash cards, and all administrative processes from applications for services and service usage to payments and settlements are recorded through a computerized system. One of the biggest changes brought on by the e-voucher program was giving consumers more choices. Prior to the introduction of e-vouchers, government social services were delivered through designated suppliers, without allowing beneficiaries any other options. However, with e-vouchers, consumers have been able to select service providers of their choosing, which has induced competition among social service providers. This research utilized Social Service e-Voucher Usage Data provided by the KHWIS in order to examine user profiles and changes in service providers. E-voucher service usage data is transmitted from service providers to the KHWIS in real time and is digitally stored. It should be noted that our research analysis does not cover service usage data that is not transmitted to the KHWIS, even if the service is delivered through e-vouchers This study tests whether consumer choice has been strengthened and how market structure has been changed in the Mother-Infant Help Service with the introduction of social service e-voucher programs. Moreover, this study estimates the determinants of market structure by adopting panel data analysis.