"Small Business Sales Increase by 430,000 Won per 1 Million Won in Consumption Coupons"... Policy Effectiveness Confirmed

Korea Institute of Public Finance Analyzes Effectiveness of Consumption Coupon Policy

13.5 Trillion Won Distributed Last Year... Net Consumption Increased by 5.9 Trillion Won

Greater Impact Seen in Non-Metropolitan Areas and Regions with High Proportion of Low-Income Groups

A study has found that the actual sales of small business owners increased by 430,000 won for every 1 million won spent through the Livelihood Recovery Consumption Coupon program.

Yonhap News

On May 7, Jang Woo-hyun, Director of the National Accounting and Fiscal Statistics Center at the Korea Institute of Public Finance, presented these findings at a seminar held to empirically analyze the effectiveness of the Livelihood Recovery Consumption Coupon policy.

This study was commissioned by the Ministry of the Interior and Safety and conducted from November last year through April this year. The research team built a sample using payment data from six major domestic credit card companies—Shinhan, Samsung, Hyundai, KB Kookmin, BC, and Hana Card—which accounted for 74.23% of all credit card payments in 2025.

According to the findings, for every 1 won spent through the consumption coupon, the actual sales of local small business owners increased by 0.433 won. Converted to 1 million won, this equates to a sales increase of 430,000 won.

The Livelihood Recovery Consumption Coupon was distributed in two rounds last year to boost consumption and support income for vulnerable groups. In the first round, every citizen received between 150,000 and 450,000 won per person. In the second round, 100,000 won was distributed to citizens excluding the top 10% income bracket.

The total amount distributed through the first and second rounds of the consumption coupons was 13.52 trillion won. Applying this, the net increase in consumption for small business owners was estimated at 5.86 trillion won.

However, Director Jang explained that this effect was the result of a combination of factors: the coupon was designed with restrictions on usage period and eligible merchants in a persistent economic downturn, and the differential allocation targeted at low-income groups with a high marginal propensity to consume. He emphasized the need to take these assumptions into account when interpreting the policy’s impact.

He noted, “The Livelihood Recovery Consumption Coupon is not government consumption expenditure, in which the government directly purchases and consumes goods, but rather a transfer expenditure that returns tax payments to citizens in the form of vouchers. Generally, transfer expenditures tend to have a limited net effect because they are primarily redistributive. The meaningful results observed in this policy are one of the key findings.”

Director Jang also explained that the policy effects varied by region. Significant sales increases were observed in areas outside the Seoul metropolitan area and in regions with a high proportion of low-income or vulnerable populations.

Among cities, counties, and districts, Dalseong-gun in Daegu recorded the highest sales growth rate at 4.30%. Within Seoul, districts with relatively lower consumption capacity—such as Dobong, Eunpyeong, and Nowon—showed higher sales growth rates than wealthier districts such as Gangnam, Seocho, and Yongsan.

Regarding the debate over whether universal or selective support is more effective, he explained, “Both the first and second rounds of this policy included elements of differentiated allocation, and detailed analysis indicated that such differentiation was crucial to maximizing policy effectiveness.”

By industry, the analysis showed that 49.6% of the total effect occurred in everyday consumer sectors such as restaurants, general retail, non-store retail, food and beverage and tobacco retail, and other specialized retail businesses.

Additionally, significant increases were observed in categories where spending had previously been postponed due to cost concerns, such as automobile and motorcycle repair and hospitals. The research team also found increases in spending on education, leisure, and cultural activities.

Director Jang further stated that it would take approximately 25 years and 10 months for the 13.52 trillion won invested in the consumption coupons to be recouped in the national treasury through increased tax revenue.

He added, “It is important to note that this recovery period is not automatic, but depends on sustained policy efforts by the government.”

This content was produced with the assistance of AI translation services.