Only 9.4% of Government Spending... Second to Last
OECD: "Korea Has the Lowest Level of Elderly Safety Net"
Among OECD countries, South Korea has the highest elderly poverty rate, but the government funding allocated to address this issue falls far short of the average.
On the 27th, the OECD released a report titled "Pensions at a Glance 2021," which compares pension policies and outcomes among member countries. Public pensions constitute the largest single item of social expenditure in most countries.
On average, OECD member countries allocate 18.4% of total government spending to public pensions. France (24.2%), Japan (24.2%), Germany (23.0%), and Finland (22.0%) each spend more than 20% of their total government expenditure on public pensions. The United States allocates 18.6%, Sweden 14.6%, and the United Kingdom 13.7%.
However, as of 2017, the South Korean government’s spending on public pensions accounted for only 9.4% of total government expenditure. This is the second lowest among all member countries, just above Iceland (6.2%), and less than half the average.
South Korea also spends relatively little on elderly support in terms of public pension expenditure as a percentage of gross domestic product (GDP). South Korea’s public pension expenditure relative to GDP is 2.8%, less than half the OECD average of 7.7%. Compared to France (13.6%), Germany (10.2%), and Japan (9.4%), this is significantly insufficient. According to the OECD report, countries spending less than 3% of GDP include Chile (2.8%), Iceland (2.6%), and Mexico (2.7%), along with South Korea.
As of 2018, South Korea’s elderly income poverty rate was 43.4%, more than three times the OECD average of 13.1%. Countries such as France (4.4%), Germany (9.1%), Sweden (11.4%), the United Kingdom (15.5%), Japan (20.0%), and the United States (23.1%) have significantly lower rates than South Korea.
The OECD stated, "Although South Korea implemented reforms in 2018, such as expanding the basic pension coverage, these measures are insufficient to effectively address elderly poverty," and assessed that "South Korea’s elderly safety net level is among the lowest in OECD member countries, alongside Colombia, Hungary, and Latvia."
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