Monday, December 5, 2011

Three out of four Korean single senior households are poor

SERI just issued* a distressing focus on Korean elder citizens: the relative poverty rate for single senior households, a booming segment of the population, is by far the highest among OECD members (76.6%).

An embarrassing fact for the most Confucian nation: as it experiences spectacular and rapid demographic and social changes, welfare systems are obviously not keeping pace. A lot has been done at the national and local levels, and elder citizens can enjoy a large array of free programs thanks to Seoul districts, from computer training to dance and cultural activities. Following 2008 reforms, single senior citizens with low revenues pay less for utilities, and can receive free food supplies on a daily basis, but not everybody is caught in the safety net. We've all seen elderlies collecting paper or cardboard on the streets, or poor farmers live in complete isolation in rural areas.

The challenge will grow bigger for ageing Korea. Between 2000 and 2010, the number of senior households almost doubled to 1.7 to 3 million, and the proportion of single senior households progressed from 31.4 to 34.2%. They now represent 1.02 million households or 6% of the total, a proportion expected to double by 2030. By 2050, 37% of the population will be over 65 (the equivalent to 70% of the working age population), compared to 7% in 2000 (10%). Like Japan, Korea might consider foreign or even robotic hands to cope with the task: there are only 3.3 long-term care workers per 1000 population over the age of 65 providing formal care, compared to 6.1 in average for the OECD**.

Parents used to take care of the grandparents***, but now it's often the other way round. Among new pensioners, many helped their descendants during the periods of crisis that have struck Korea since 1998, cutting into their own savings. The future doesn't look much better: we recently mentioned credit card threats (see
"The Earnit Kingdom: Loan Sharks Feeding Frenzy"), but many Koreans are also eating up their pension plans just to stay afloat. Poverty is also a matter of demographics: survivors in the couple tend to be women born before the democratization of superior education, with a high proportion of former housewives with a minimum pension.

Among the potential impacts on policies cited by SERI (Single Senior Households Should Be Target Group to Reduce Poverty, Financial Management Service for Low and Middle-Income Classes, Pension Splitting for Elderly Divorcees, Increasing Survivor Pension Benefit Rate for Elderly Women), a point seems to be missing: infrastructures and particularily retirement and nursing homes. There are solutions for daytime isolation, and silver centers and even cities are on the rise, but will the people who need them most be able to afford them?

Seoul Village 2011
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* "
Single Senior Households: Income Among the Aging Population" (SERI - December 5, 2011), data by Statistics Korea (
** "
Long-Term Care in Korea" (OECD - May 18, 2011)
*** In 1981, only 20% of people over 60 lived separately from their children, and the proportion rose to 41.7% in 1998. I don't have more recent figures but the trend must have continued

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