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The Economic Determinants of Old-Age Poverty in South Korea: Evidence from Longitudinal Household Data

Author

Listed:
  • Giannelli, Gianna

    (University of Florence)

  • Hegyi, Tamara

    (University of Florence)

Abstract

In South Korea, nearly 40% of the elderly population lives in poverty, one of the highest rates in the developed world. As the country undergoes a rapid demographic transition and the share of older individuals increases, understanding the drivers of old-age poverty becomes increasingly important. We study the economic determinants of poverty among individuals aged 65 and over using eight waves of the Korean Longitudinal Study of Aging and the Korean Labor and Income Panel Study covering 2006-2020. We adopt a longitudinal framework and estimate fixed-effects ordered logistic regression models where poverty status is measured as an ordered outcome. The results show that living apart from one's children and residing in rental housing are associated with greater poverty. In contrast, co-residence with children, homeownership, and continued employment are strongly linked to lower poverty levels. Public transfers show no statistically significant association with poverty outcomes. These findings stress the importance of family co-residence, housing tenure, and labour market attachment in shaping old-age poverty in South Korea and suggest expanding housing support, employment opportunities, and strengthening social security coverage.

Suggested Citation

  • Giannelli, Gianna & Hegyi, Tamara, 2026. "The Economic Determinants of Old-Age Poverty in South Korea: Evidence from Longitudinal Household Data," IZA Discussion Papers 18488, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18488
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    References listed on IDEAS

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    1. Kang, Ji Young & Park, Sojung & Ahn, Seoyeon, 2022. "The effect of social pension on consumption among older adults in Korea," The Journal of the Economics of Ageing, Elsevier, vol. 22(C).
    2. Hyunjeong Hwang & Axel Purwin & Jon Pareliussen, 2022. "Strengthening the social safety net in Korea," OECD Economics Department Working Papers 1733, OECD Publishing.
    3. Hwang, Seokchae & Choe, Chung & Choi, Koangsung, 2021. "Population ageing and income inequality," The Journal of the Economics of Ageing, Elsevier, vol. 20(C).
    4. Nelson, Julie A, 1988. "Household Economies of Scale in Consumption: Theory and Evidence," Econometrica, Econometric Society, vol. 56(6), pages 1301-1314, November.
    5. Jooyeon Kang & Jungmin Park & Jaemin Cho, 2022. "Inclusive Aging in Korea: Eradicating Senior Poverty," IJERPH, MDPI, vol. 19(4), pages 1-21, February.
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    Keywords

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    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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