Spending Less Than Ten Years Ago... Increased Share of Healthcare and Cultural Consumption Expenditures

Average Propensity to Consume Declines Across All Age Groups
Consumption Among People in Their 60s Drops from 69% to 62%
Monthly Spending by Those in Their 20s and 30s Also Decreases
"Spending Habits Are Changing, with People Spending Less"

The average propensity to consume (APC) among the entire population has declined compared to ten years ago. In particular, the APC among people in their 60s has dropped significantly, and the average monthly spending among those in their 20s and 30s has also decreased.

According to the report "Changes in Consumption Propensity by Generation and Implications," published by the Korea Chamber of Commerce and Industry on June 1, the average propensity to consume?which represents the proportion of household disposable income spent on consumption?has declined compared to ten years ago. The APC among people in their 60s fell from 69.3% in 2014 to 62.4% in 2024, marking the largest decrease among all age groups. The average monthly consumption expenditure for people in their 20s and 30s also dropped from 2.57 million won in 2014 to 2.48 million won in 2024.

The report analyzed changes in income, consumption expenditure, and propensity to consume by age group, based on Statistics Korea’s Household Income and Expenditure Survey data from 2014 and 2024. The analysis found that, except for those in their 30s and younger, all generations experienced an increase in income over the past decade. However, consumption expenditure did not increase proportionally, and the overall APC fell by 3.3 percentage points in 2024 compared to 2014.

Shin Donghan, a researcher at the Korea Institute for Industrial Economics & Trade, stated, "The share of disposable income spent on consumption expenditure, after excluding non-consumption expenditures such as interest from home purchases and various taxes, has decreased." He added, "The main reasons for reduced consumption across generations include aging and income issues, but changes in spending habits?specifically, a tendency to spend less?also appear to play a significant role."

The structure of consumption has also changed significantly, particularly for items such as beauty devices and services, personal items like bags and watches, insurance premiums, and welfare facility usage fees. Over the past ten years, the categories with the largest increases in spending share were healthcare (up 2.6 percentage points), leisure and culture (up 2.4 percentage points), food (dining out) and accommodation (up 0.7 percentage points), and housing and utilities (up 0.7 percentage points).

Arrival hall of Incheon Airport Terminal 2. Photo by Yonhap News.

The main factors are seen as increased demand for medical services due to aging, expanded spending on leisure and hobbies, and the normalization of value-based consumption such as dining out and travel. Value-based consumption refers to spending that considers personal values and beliefs in addition to price and quality.

In particular, the increased share of healthcare spending is not only for disease treatment but also includes procedures and treatments for cosmetic purposes, indicating a growing interest in "well-aging"?aging in a healthy and natural way.

In contrast, the spending share on traditional necessities such as food and beverages (down 2.3 percentage points), clothing and footwear (down 1.6 percentage points), and education (down 0.9 percentage points) has decreased. This is interpreted as the result of several factors: the increase in single-person households, the widespread availability of ready-to-eat meals, efficient purchasing through online platforms, the spread of the used and sharing economy, and a decline in the student population due to low birth rates.

An analysis of changes in consumption item shares by age group revealed distinct heterogeneity. Among younger generations, the spending share on food (dining out) and accommodation, as well as housing and utilities, has increased, whereas among older generations, the share spent on healthcare-related consumption has risen.

For those in their 30s and younger, the share of spending on food and beverages declined by 3.9 percentage points, but the shares for food (dining out) and accommodation (up 3.1 percentage points) and leisure and culture (up 3.1 percentage points) increased sharply. This reflects the consumption patterns of the MZ generation, for whom travel, gourmet experiences, and digital content consumption have become routine.

Among people in their 40s, spending on various hobbies, sports, and entertainment facilities (such as gyms and screen golf) has increased, reflecting a rise in self-satisfaction-oriented consumption. In their 50s, people are focusing more on "consumption for oneself," with beauty devices, home interior products, and ready-to-eat meals emerging as core consumption items. For those in their 60s and 70s and older, spending on not only medical services but also musical instruments, photography, and hobby activities has surged, establishing "enjoying a healthy and active old age" as a new trend. In fact, the top categories for increased consumption expenditure include floral and pet-related services, adult academies, sports facilities, and musical instruments.

The report stated, "This analysis goes beyond simple changes in generational consumption behavior," and added, "Shifts in consumption trends can have a significant impact on the industrial structure." It continued, "As a result of the declining birth rate, the number of children receiving secondary education has decreased, leading to a significant drop in secondary education-related spending across all age groups. The decline in the school-age population due to low birth rates is highly likely to result in a contraction of the entire education industry."

Jang Geunmoo, head of the Distribution and Logistics Promotion Center at the Korea Chamber of Commerce and Industry, said, "The sluggish consumption in Korea is not simply due to an economic downturn, but is a phenomenon arising from changes in demographics, income, and psychology across Korean society as a whole. Therefore, there are limits to short-term stimulus measures." He emphasized, "It is necessary to restore sustainable growth momentum through customized policies that take into account the characteristics of each generation."