J Korean Gerontol Nurs.  2024 May;26(2):212-220. 10.17079/jkgn.2023.00339.

An analysis of the impact of long-service allowance on care workers' retention in long-term care facilities in Korea: A quantitative study using difference-in-difference approach

• KMID: 2557295
• DOI: http://doi.org/10.17079/jkgn.2023.00339

Abstract

Purpose
Aging societies worldwide face the significant challenge of retaining skilled personal care workers (PCWs). In September 2017, the South Korean government launched a financial incentive program, offering a long-service allowance (LSA) to PCWs in nursing homes. This allowance is designated for those who have consistently worked over 120 hours per month for over 36 months. This study evaluates the impact of this publicly funded LSA on the job tenure of PCWs in nursing homes, using claim data from the National Health Insurance Service. Methods: Utilizing a difference-in-difference approach, this research compares the tenure changes among LSA-eligible and non-eligible PCWs before and after the implementation of the LSA. It analyzes 2,095,503 cases from January 2016 to April 2019, employing regression-based panel data analysis. Results: Despite a general trend of decreasing PCWs’ job tenure and rising minimum wages, the LSA seems to affect LSA-eligible PCWs’ tenure positively. After adjusting for socio-demographic, job-related, and organizational factors, the study found that the tenure of LSA-eligible PCWs extended by 85 days within the 20-month observation period, in contrast to a decrease among their non-eligible counterparts. Conclusion: The LSA is considered to be effective in retaining mid-level PCWs, indicating its potential as a measure for workforce retention. However, its effectiveness in substantially increasing the overall supply of the PCW workforce is somewhat constrained.