Addressing the Demographic Decline in South Korea / DANIEL CARROLL, SEWON HUR, SELAHATTIN IMROHOROGLU, AND BRADEN STRACKMAN

In this paper, we use an overlapping-generations standard-incomplete markets model to quantitatively investigate the long-run implications of Korea’s demographic changes and policy reforms. Importantly, our quantitative model endogenizes the retirement decision and matches the elasticity of retirement to wealth. We use the model calibrated to Korea’s economy and demography as a quantitative laboratory to investigate two policy scenarios: increasing taxes or decreasing benefits. While decreasing benefits leads to greater long run activity, it comes at the cost of lower average welfare, particularly for retirees.

Can Healthy Aging Boost the Labor Supply? Evidence from Korea / BERTRAND GRUSS, ERIC HUANG, ANDRESA LAGERBORG, DIAA NOURELDIN, AND GALIP KEMAL OZHAN

This paper examines the role of ‘healthy aging’ in boosting labor supply in Korea. First, we use microdata from surveys to assess whether there is evidence that the physical abilities of individuals aged 50 years and above have been improving over successive cohorts. Second, we investigate whether health improvements among older workers influence their labor market outcomes, such as the decision to supply labor or to retire. We use an instrumental variable approach to enable causal inference, proxying exogenous variations in health with the incidence of certain chronic diseases. Our findings reveal that (i) physical health indicators have improved on average across birth cohorts, providing evidence in favor of ‘healthy aging’ in Korea, and (ii) better health increases the probability of participating in the labor force and postponing retirement. Overall, our results suggest that healthy aging increased the labor supply of older individuals in Korea by around 1.9 percentage points per year during the period 2006-20. The results for Korea are qualitatively comparable but quantitatively
somewhat stronger than those for comparator Asian countries.

Marriage and Child Penalties: Evidence from South Korea / MINSUB KIM

This paper documents marriage and child penalties in Korea, where the female labor supply remains constrained by marriage and childbirth despite the urgent need to promote the female labor supply in the face of the world’s most rapidly aging population. Using an event-study approach and nationally representative panel data, I find substantial marriage and child penalties in Korea. Unlike developed countries, Korea exhibits a significant marriage penalty that cannot be explained by childbirth-related factors. While marriage penalties declined during the 2010s, child penalties have prevailed despite the expansion of various family policies over the same period. The persistence of child penalties is discussed in relation to prevailing social norms and rigid labor market structures that limit mothers’ labor supply.

Recent Socioeconomic Differentials in Marriage Rates in Korea and China: A Comparative Study / MINHEE CHAE

This paper explores the relationship between socioeconomic status (SES) and the recent rapid decline in marriage rates in China and South Korea, using nationally representative longitudinal data. The analysis shows that recently rising never-married rates (NVMR) are increasingly concentrated among lower-SES individuals, especially in highly urbanised areas in both countries, highlighting the growing significance of financial barriers to family formation in recent years. Furthermore, income has become a stronger predictor of marriage entry by men in both nations. The overall rise in the NVMR reflects delayed marriage among the Chinese population and Korean women, but more persistent singlehood among lower-SES Korean men aged over 35. Notably, the faster growth of the NVMR among lower-SES groups has narrowed overall SES differences in marriage rates, eroding the historical pattern in which lower-SES individuals married earlier and more universally. In other words, marriage differentials based on SES are disappearing on absolute levels. This suggests that while financial constraints remain a key influence, broader structural and cultural shifts ― such as evolving gender norms and rising opportunity costs ― are also critical for understanding recent marriage declines in East Asia.

Population Aging and Living Arrangements: Implications on Inequality / SANG-HYOP LEE, ANDREW MASON, AND HYUN KYUNG KIM

Many previous studies conclude that population aging leads to an increase in consumption or income inequality. The results are based on a conventional model that analyzes compositional effects given interage differences in the means and variances of income. These issues are addressed in this paper by (1) developing a new empirical strategy for estimating the effects of population aging, income, and other socioeconomic variables on living arrangements; (2) extending the standard model of income inequality to incorporate responses in relation to one aspect of the familial support system the formation of multigenerational households (or extended households); and (3) applying the models to South Korea, where familial support has been important source of consumption for older people. In particular, this paper complements previous studies by incorporating the responses of familial support systems to changes in the age distribution of the population. Our model and empirical results suggest that (1) population aging could have led to a greater increase in the proportion living in extended households, but improvements in survival have had a weaker effect than the fertility decline on the proportion of people living in extended households, (2) higher incomes of workers in Korea could have led to more of a shift away from extended households, and (3) an increase in both the proportion of the family cohort and the proportion of pensioners living in extended households reduces the variance in income. These results support the argument that co-residence and population aging may reduce income inequality.

Addressing the Demographic Decline in South Korea / Daniel Carroll, Sewon Hur, Selahattin Imrohoroglu, and Braden Strackman
　I. Introduction
　II. Stylized Facts
　III. Model
　IV. Quantitative Results　
　V. Conclusion
　APPENDIX
　REFERENCES

Can Healthy Aging Boost the Labor Supply? Evidence from Korea / Bertrand Gruss, Eric Huang, Andresa Lagerborg, Diaa Noureldin, and Galip Kemal Ozhan
　I. Introduction
　II. Literature
　III. Empirical Strategy
　IV. Evidence of Healthy Aging　
　V. Effect of Health on Labor Market Status
　VI. Concluding Remarks
　APPENDIX
　REFERENCES

Marriage and Child Penalties: Evidence from South Korea / MINSUB KIM
　I. Introduction
　II. Research Methodology
　III. Data and Descriptive Statistics
　IV. Empirical Results　
　V. Conclusion
　APPENDIX
　REFERENCES

Recent Socioeconomic Differentials in Marriage Rates in Korea and China: A Comparative Study / MINHEE CHAE
　I. Introduction
　II. Overview of Long-term Trends in Marriage Rates
　III. Data
　IV. Socioeconomic Status and Recent Marriage Declines
　V. Temporal Changes in Socioeconomic Differentials in Never-married Rates
　VI. Discussion
　VII. Conclusion
　APPENDIX
　REFERENCES

Population Aging and Living Arrangements: Implications on Inequality / SANG-HYOP LEE, ANDREW MASON, AND HYUN KYUNG KIM
　I. Introduction
　II. Living Arrangements and Co-residence Model
　III. Co-residence and Income Inequality Model
　IV. Empirical Analysis
　V. Conclusions
　APPENDIX
　REFERENCES