Survey: 27 years later, South Korea will be "old and poor" with an aging population and a high poverty rate for the elderly

　　China News Service, February 20. According to South Korea’s "Joongang Ilbo" report on the 19th, surveys show that South Korea has become the country with the fastest growth rate of the elderly population among member countries of the Organization for Economic Cooperation and Development (OECD, hereinafter referred to as OECD).

It is estimated that by 2048, South Korea will become the country with the largest elderly population among the OECD member countries.

At the same time, the poverty rate of the elderly in South Korea is also the highest among the OECD member states, and measures urgently need to be introduced.

　　On February 17, the Korea Institute of Economic Research (Han Jingyan for short) released the results of an analysis of the aging status and countermeasures in 5 countries including the United States, the United Kingdom, Germany, France, and Japan and South Korea.

The analysis results show that from 2011 to 2020, the average annual growth rate of South Korea’s population over 65 years old is 4.4%.

In other words, the elderly population in South Korea has increased by 290,000 annually for the past ten years.

South Korea’s aging rate is 1.7 times the average of OECD member countries (2.6%), the fastest growth rate.

　　At present, South Korea’s elderly population ratio is 15.7%, ranking 29th among the 37 member states of the OECD.

If this trend is followed, by 2041, 20 years later, this rate will reach 33.4%, and one out of every three people will be an elderly person.

It is estimated that by 2048, South Korea’s elderly over 65 will account for 37.4% of the total population, making it the oldest country among the OECD member countries.

　　While the proportion of the elderly population in South Korea has increased sharply, compared with other countries, there are more Korean elderly in economic difficulties.

According to data from the Korean Economic Research Institute, as of 2018, the poverty rate of the elderly in South Korea (43.4%) is the highest among OECD member countries, about three times the OECD average (14.8%).

　　According to the head of the Economic Policy Office of the Korean Economic Research Institute, Qiu Guanghao (transliteration), "The poverty rate of the elderly in South Korea is much higher than that of the United States (23.1%), Japan (19.6%), the United Kingdom (14.9%), Germany (10.2%), and France (4.1%). Waiting for the ratio of G5 countries", "the elderly in South Korea are very poor, and South Korea’s rapid aging rate makes it difficult to find a precedent in the world."

　　Someone pointed out that the first reason for the aging and poverty of the elderly is the inflexible labor market.

In other words, because the South Korean government has tightened control over the employment conditions of dispatched workers and contract workers, the employer’s dismissal costs have risen, so companies have little room for flexible employment or adjustment of staffing.

　　Therefore, it was pointed out that in the long run, the employment difficulties of young people are linked to the problem of low fertility, which will also exacerbate the aging phenomenon, and the employment difficulties of the elderly will in turn lead to an increase in the elderly poverty rate.

　　Cheng Taiyin, a professor at the Department of Economics at Yonsei University in South Korea, said, “Recently, changes in the labor system have led to increased labor costs and decreased labor market flexibility, making it difficult for companies to expand employment.” “Young people who fail to find a job cannot get married. The reasons leading to the decline in the birth rate and the acceleration of aging".

　　In response to this problem, Han Jingyan suggested that South Korea should strengthen the role of national pensions to solve the problem of high poverty rates for the elderly.

　　According to data from the Korean Economic Research Institute, as of 2018, the income replacement rate of public and personal pension insurance in South Korea was 43.4%.

That is, the combination of private pensions such as retirement pensions and personal pension insurance and public pensions such as national pension insurance and civil servants' pension insurance can not reach half of the average income before retirement.

However, the average pension income replacement rate in G5 countries such as the United States is 69.6%.

　　According to the analysis of the Korean Economic Research Institute, the United States and other G5 countries have promoted their citizens to join private pension insurance through tax incentives, so even if they rely solely on pension funds, they can maintain their previous income levels.

　　However, South Korea’s private pension insurance tax rate is 20.0%, and the participation rate is only 16.9%.

　　The head of the Korean Economic Research Office, Qiu Guanghao, said, “While the major countries encourage their citizens to join private pension insurance, they also increase and postpone the payment and age of public pension insurance to ensure fiscal integrity.” “South Korea should also strengthen private pension insurance. To increase the efficiency of public pension funds and increase the national pension income base.”