The first payment of "rural basic income" to residents in 10 rural areas facing population extinction was distributed on Feb. 27, raising expectations for population recovery and economic revitalization among selected local governments. At the same time, side effects such as fraudulent residency registrations and balloon effects are emerging, prompting calls for institutional improvements.
According to local governments on March 3, the rural basic income pilot program is a government policy that provides 150,000 won ($103) per month in local currency to residents of population-declining areas for two years, regardless of income or assets. The goal is to stimulate consumption within these regions and revitalize struggling local commercial districts. The 10 designated areas are Yeoncheon in Gyeonggi Province, Jeongseon in Gangwon Province, Okcheon in North Chungcheong Province, Cheongyang in South Chungcheong Province, Sunchang and Jangsu in North Jeolla Province, Gokseong and Sinan in South Jeolla Province, Yeongyang in North Gyeongsang Province, and Namhae in South Gyeongsang Province. The currency can only be used in the town or township where recipients reside, with a 50,000 won spending cap at gas stations, convenience stores, and Hanaro Mart cooperative stores to prevent consumption concentration.
Population inflows are evident in the numbers. Yeoncheon County's population rose from 40,997 in October last year—just before pilot area selection—to 42,494 in February, an increase of 1,497. During the same period, 3,324 people moved in while 1,698 moved out, resulting in a net inflow of 1,626 and averting a collapse below 40,000. Okcheon County also surpassed 50,000 residents for the first time in four years since February 2022, adding 1,591 people within two months of announcing the basic income payment plan. Namhae County, whose population fell below 40,000 in 2024, recovered to 40,770 within a year. Analysts suggest that rural basic income, combined with regional education and sports infrastructure and return-to-farming policies, is driving population inflows.
Meanwhile, cases of institutional abuse are mounting. In Yeongyang County, instances of fraudulent residency registration were detected, including one case where a child attending school in Gwangju Metropolitan City had their registration transferred to Yeongyang. Cases were also found where addresses were changed to temporary structures such as farm huts or shipping containers. In Sinan County, some residents living in Mokpo moved only their registered address to their parents' homes in Sinan.
Concerns about balloon effects are also significant. When Cheongyang County conducted a comprehensive analysis of new residents during the two months following its selection as a pilot area, 40% came from nearby areas including Gongju, Hongseong, and Yesan. While Cheongyang saw its population decline reverse for the first time in nine years since 2017, numbers have begun falling again this year, leading some to suggest "the basic income effect may have already peaked." Many new residents in Yeoncheon County also relocated from nearby population-declining areas such as Pocheon and Dongducheon, raising concerns that population growth in specific areas may come at the expense of surrounding regions.
Accordingly, calls are growing for sophisticated supplementary measures across system design and operation. Proposals include requiring actual residency for a minimum period before granting eligibility, and strengthening verification by comprehensively checking school and workplace locations against actual living areas to prevent fraudulent registrations. Others suggest implementing effective sanctions such as benefit recovery and restrictions on re-enrollment when fraudulent claims are detected.
Local officials predict that policy effects may be limited without improving actual settlement conditions. The key, they say, is to create "livable communities" by combining institutional reforms—such as preventing fraudulent registrations and strengthening residency verification—with comprehensive packages covering employment, housing, education, and childcare infrastructure. Yeoncheon County Governor Kim Deok-hyun said, "Rural basic income is an essential program for areas facing regional extinction," adding, "We will use the payment period as an opportunity to simultaneously pursue housing, employment, transportation, and community policies to secure growth momentum for the region."