Non-market Household Production and Intergenerational Transfer in Korea : Analysis of the National Transfer Accounts

The purpose of this study is to grasp how market and non-market production are produced and consumed in each age group and how the gaps between production and consumption are reallocated to each generation. In addition, we investigate the differences between Korea and selected European countries from the results. Our analysis is based on concepts and data from the National Transfer Accounts (NTA) methodology that can macroscopically measure the production, consumption, and transfer across age to agree with the aggregate value of System of National Accounts (SNA). The main findings of this study are as follows. First, the asset reallocation of the elderly increased considerably. It could be good news to decrease social support burden for the elderly, but otherwise it could be also bad news to express pure welfare system for the elderly. However, it is the results from 2000 to 2005, and it is clear that government role will increase more as population aging proceeds. Second, from the results of reallocation system including unpaid household work, the elderly is also playing the productive role and it is not desirable to recognize the elderly as the supported group who only consume by simply limiting to the market production. Third, this study empirically analyzes the role of non-market household production as the answer to the retirement-consumption puzzle. Considering unpaid household work, the drop in consumption after retirement greatly decreases, and the level of consumption on the lifecycle remains smoother and the level of consumption after retirement ages seems to be slightly more constant. Fourth, there are significant cross-country differences in the age-specific levels and production types by age and gender. And we reconfirm the usefulness of the aggregate NTA lifecycle deficit (LCD) as a concept of an economic dependency ratio that can reflect not only population structure but also the design of economic life course.