S. Korea Tops OECD in Elderly Poverty... "Spending Later Life as Poor Low-Wage Workers"

Elderly people walking on the street near Tapgol Park in Jongno-gu, Seoul. This image is not directly related to the article.

As South Korea rapidly ages, many citizens are found to be seriously lacking in retirement preparation, leading to severe elderly poverty.

On the 4th, according to the Korea Employment Information Service, O Tae-hee, a manager at the Bank of Korea, and Lee Jang-yeon, an assistant professor at Incheon National University, presented a paper containing these findings at the 'Employment Panel Survey Academic Conference' held the previous day.

The average life expectancy in South Korea increased from 72 years in 1991 to 86 years in 2021, a span of 30 years. However, many elderly people face economic difficulties due to the immaturity of public and private pension systems, mid-term settlement of severance pay, rapid increase in life expectancy, and insufficient savings. In fact, as of 2020, South Korea's elderly poverty rate was 40.4%, the highest among OECD member countries.

The lack of retirement preparation leads to a high employment rate among the elderly. South Korea's employment rate for those aged 65 and over was 34.9% in 2021, also ranking first in the OECD. This means many elderly people work to make a living even in old age.

Most are low-wage workers. Last year, the average monthly earnings of 68-year-old workers in South Korea were 1.8 million won, which is 42% less than that of 58-year-olds (3.11 million won). The labor market participation rate and average monthly earnings for 50-year-olds were 97% and 3.71 million won respectively, but both steadily declined thereafter; at age 75, 27% were working, with an average monthly income of only 1.39 million won.

The proportion of elderly people aged 65 and over in the total population is expected to rise from 17.5% last year to 46.4% by 2070. This indicates that South Korea's elderly poverty problem is likely to worsen in the future.

The paper stated, "Unlike elderly people in major advanced countries who achieve economic stability and voluntarily retire earlier to enjoy more leisure time, a significant number of elderly in South Korea spend most of their later life as poor, low-wage workers."