Korea's 40% Elderly Poverty Rate as "OECD's Highest" Is a Statistical Illusion (July 1, 2023)

As of 2020, Korea's elderly poverty rate stands at 40.4%, the highest among all member countries of the Organisation for Economic Co-operation and Development (OECD).

Why does Korea record one of the world's highest poverty rates for the elderly, even though Korean seniors hold considerable wealth comparable to their counterparts in the United States or Japan?

Scholars point to a "statistical trap." The poverty rate as defined by the OECD is not an "absolute poverty rate" but a "relative poverty rate," measuring what proportion of the elderly falls below 50% of the median income.

In this context, "income" refers to "disposable income." An individual is classified as being in poverty when the income remaining after deducting mandatory expenditures such as taxes from monthly earnings falls below the overall median value (the midpoint when all values are arranged in order).

This measure considers income only, excluding assets such as real estate held by the elderly. As a result, it fails to reflect the distinctive characteristic of Korean society, where real estate constitutes a very high proportion of total household assets.

For this reason, when the Korea Institute for Health and Social Affairs (KIHASA) recalculated the elderly poverty rate in 2017 by incorporating real estate asset holdings, the rate fell sharply to 21%.

Yoon Seok-myung, the Research Fellow at KIHASA who led that study at the time, stated that "a multidimensional analysis accounting for not only income but also assets and health satisfaction reveals that elderly individuals who are genuinely impoverished — lacking both income and assets — number approximately 2 in 10," and

further cautioned that "welfare policies for the elderly must not be formulated on the basis of OECD elderly poverty statistics that diverge significantly from actual conditions."

https://n.news.naver.com/article/023/0003772976?sid=101