Does home equity liquidation reduce older adults’ poverty rate? Evidence from South Korea

Bibliographic Data

ID12937696
AuthorsKyung-jin Choi (corresponding author), Sanha Noh (0000-0002-4712-783X, Jeonbuk National University), Ingul Baek (0000-0001-9610-8355, Kongju National University)
Year2022
Volume30
Issue1
Pages59-76
Publication date2022-01-24
Open AccessNo
TypeARTICLE
VenueJournal of Poverty and Social Justice (JOURNAL)
Journal identifiersISSN: 1759-8273 • E-ISSN: 1759-8281
PublisherPolicy Press (PUBLISHER • GB)
DOI10.1332/175982721x16385307728468
OpenAlexW4206924354
LanguageEN
Citations received1
References cited7

We investigate relative poverty rates among older adults from a unique dataset using an actuarial method applied to a public reverse mortgage in South Korea, which liquidates home equity and converts the assets to a readily available income. We find that it increases disposable income by approximately 20 per cent on average for older adults, and the improvement is more effective in the low-income quintiles. Due to the increased income, elderly poverty rate reduces significantly by 10 percentage points to about 31 per cent. Therefore, the elderly poverty rate following the OECD standard overestimates the elderly poverty rate and could misguide welfare policies

Demographic economics · Economic growth · Economics · Equity (law · Low income · Political science · Poverty · Poverty rate · Public economics · Public welfare · Welfare · Financial Literacy, Pension, Retirement Analysis · Housing, Finance, and Neoliberalism · Intergenerational Family Dynamics and Caregiving

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