Poverty Among Elderly in Korea: Causes and Solutions

As Korea is rapidly aging, many people Poverty among the elderly is a serious problem due to lack of preparation for old age.

According to the Korea Employment Information Service on the 4th, Bank of Korea chief Oh Tae-hee and Incheon University assistant professor Lee Jang-yeon presented a thesis containing these contents at the ‘Employment Panel Survey Academic Conference’ the day before.

The average life expectancy in Korea has increased from 72 years in 1991 to 86 years in 2021, after 30 years. However, many elderly people suffer from economic difficulties due to the immaturity of public and private pension systems, the interim settlement of retirement benefits, the rapid increase in life expectancy, and the lack of savings. In fact, as of 2020, Korea’s elderly poverty rate was 40.4%, the highest among OECD member countries.

Lack of preparation for retirement leads to high employment rates among the elderly. The employment rate of those aged 65 or older in Korea is 34.9% as of 2021, which is also the highest in the OECD. There are many people who work even when they are old to make a living.

Most of them are low-wage workers. Last year, the average monthly earned income of 68-year-old workers in Korea was 1.8 million won, 42% less than that of 58-year-olds (3.11 million won). The labor market participation rate and average monthly earned income of 50-year-olds were 97% and 3.71 million won, respectively, but it has continued to decline since then, with 27% of 75-year-olds working, and their average monthly earned income was found to be only 1.39 million won.

The proportion of the elderly aged 65 or older in the total population is expected to increase from 17.5% last year to 46.4% in 2070. This means that the problem of poverty among the elderly in Korea is likely to worsen in the future.

“Unlike the elderly in major developed countries who voluntarily retire earlier and spend more leisure time after achieving economic stability, many of the elderly in Korea spend most of the latter half of their lives as poor, low-wage workers,” the paper said.