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KMID : 1124020200360030029
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Korean Social Security Studies
2020 Volume.36 No. 3 p.29 ~ p.53
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Impact of Public Pension Income on the Private Transfer Income in Elderly Korean Households
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Park Jong-Seon
Jeong Se-Eun
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Abstract
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This study analyses whether public pension income crowds out private transfer income in the elderly households of South Korea with a view to empirically test conventionally-presumed “crowding out” effect. To do this, we built a balanced panel data using the Korean Retirement and Income Study data from 4th to 7th survey and then conducted Random Effects Tobit regressions. The analysis produced results finding positive relationship between public pension and private transfer income, casting skeptical view to “crowding out” effect. No “crowding out” effect seems to be understandable considering that the Confucius “filial duty” norm still plays a significant role in Korean society. Especially the fact that the disposable income falls short of the required level of the minimum living expense in as much as the half of elderly households could make this norm play strongly. To verify this possibility, deficit and surplus households were separately analyzed with the same methodology. And we found that the strong positive relationship between public and private transfer was significant for the deficit household while we found the same positive but weaker relations in the surplus households. These results suggest that the duty of supporting based on Confucius “filial duty” norm still plays a significant role in Korean society and that this duty is more strongly effective in the deficit Elderly households.
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KEYWORD
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Public Pension Income, Private Transfer Income, Crowding-out Effect, Korean Elderly households
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