It is known that the differences of economic well-being among elderly people are extensive. The purpose of this paper is to present a recursive life-span model of economic well-being for the elderly in Korea, to analyze factors affecting the difference of their economic well-being, and to evaluate the relative importance of its determinants.
Although cash income remains the simplest and most commonly used indicator of economic well-being, it is widely recognized that this measure clearly undervalues the actual abilities of elderly people to maintain their economic status since many other consumable resources are ignored. Therefore, in this paper, economic well-being was respresented by a more inclusive measurement of wealth and income. It also traces the influences of education, occupational status, industrial sector location, monthly wage before pension entitlement, and present work status on economic position in old-age.
All the variables included in the model are proved to influence economic well-being significantly and the model totally explains about 41% of the variance in a measure of economic well-being. Comparing only the size of direct effect on economic well-being, monthly wage before pension entitlement is the highest of five independent variables. But in terms of total effect including indirect effect affecting through its effects on other variables, education is the highest.
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