A town that pays you to stay? Inside Korea’s rural basic income trial

An aerial view of Kyodong Lake in Okcheon, North Chungcheong Province (Newsis)

In rural counties in central South Korea, residents are being paid simply for living there.

One example is Okcheon in North Chungcheong Province. The farming community, facing long-term population decline, has seen more than 1,000 people move there in just over two weeks.

Behind the sudden surge in such a small town is a state-backed pilot program that provides every resident with what the government calls “rural basic income,” with no employment requirement attached.

Under the scheme, residents receive a stipend of 150,000 won ($102) per month for two years, paid in local vouchers. For a four-person household, the total benefit amounts to 14.4 million won over the trial period, a significant sum in a region where average incomes and living costs are far lower than in major cities.

Local officials say the influx highlights both the appeal and the risks of a policy designed to fight what South Korea increasingly calls “regional extinction.”

The program is part of a national policy experiment seeking to reverse depopulation in aging rural areas. South Korea’s rapid urbanization has concentrated jobs, education and infrastructure in the Seoul metropolitan area, while small towns and farming communities steadily lose residents.

Okcheon was officially designated a “population decline area” in 2021. By early 2022, its population had fallen below 50,000 — a symbolic threshold for local governments. Until recently, the trend showed little sign of reversing.

That changed after Okcheon was named one of 10 pilot regions for the stipend program earlier this month.

The ten counties include Yeoncheon in Gyeonggi Province, Chungseon in Gangwon Province, Chungyang in South Chungcheong Province, Sunchang in North Jeolla Province and Namhae in South Gyeongsang Province.

From Dec. 3-19 alone, 976 people moved their registered address to Okcheon, pushing the total number of new residents to more than 1,000. The number of residents moving to the region has hovered at an average of 70 every day.

The surge has already nudged Okcheon’s population upward, raising hopes that the county could soon reclaim the 50,000 mark for the first time in more than two years.

The program will run nationwide from 2026 to 2027, with the central government covering 40 percent of the cost and the rest split between provincial and local governments. All registered residents in selected regions will receive the benefit, regardless of income or employment status.

Okcheon residents celebrate the region’s designation for the rural basic income program on Dec. 4 (Newsis)

Local officials cautiously welcome the influx, but say numbers alone do not guarantee success.

Authorities are stepping up inspections to prevent “paper residency,” cases where people register an address solely to receive the payments without actually living in the area. Officials plan on-site checks, verification of housing arrangements and oversight by community committees familiar with local residents.

“We see the increase as a clear expectation effect from the basic income,” a county official said. “But our focus is making sure it leads to real settlement, not temporary registration.”

The final list of eligible recipients is expected to be confirmed early next year, after residency checks are completed.

The financial burden is another point of contention.

Over the two-year pilot period, Okcheon must secure about 53 billion won in funding — roughly 30 percent of the county’s entire budget — forcing officials to rethink how much they can spend on everything else.

Because Okcheon was selected late for the pilot, it must cover about 26.5 billion won of its share next year alone, leaving little time for long-term budget planning.

Officials say they are scrambling to meet the funding requirement through budget cuts and emergency adjustments.

Some local programs have already been suspended, administrative spending trimmed and temporary work hours reduced as officials free up funds.

County officials say welfare services and agricultural support for vulnerable residents will not be cut, but critics argue the program is reshaping local finances in ways that far exceed a simple pilot project.

Ironically, the very population growth the program aims to encourage also drives up its cost. The 976 new residents who moved their registered address into the county during the surge are expected to raise total payouts by more than 3.5 billion won over two years.

At the provincial level, North Chungcheong Province faces a similar strain, as it must shoulder its share of the cost while coping with declining tax revenue. Officials have not ruled out issuing additional local bonds and are urging the central government to raise its funding ratio.

Critics argue the program amounts to a large-scale fiscal restructuring, forcing local governments to bet scarce resources on population growth that may prove temporary.

jychoi@heraldcorp.com