Ageing Baby Boomers’ Disposable Income Reduction and Housing in Korea: A Welfare Problem

The welfare of the elderly becomes one of the emerging problems in many regions in Korea, whose baby boomers are about to become the elderly. Few studies, however, have addressed the (potential) need for their social welfare, which is expected to rapidly rise soon after retirement. Since the subprime crisis, the house-poor phenomenon is not limited to the U.S. In Korea, especially post-1945 baby boomers comprise most of the house poor. These recent owners of ‘highly leveraged’ housing assets, which once produced unprecedented margins during the housing boom 1998 - 2007, have become the house poor with massive home equity debt including lease-deposit debt. Thus, the relation between disposable housing assets and disposable income determines their post-retirement potential poverty, along with the ‘socioeconomically’ declining income and ‘physically’ declining work ability of ageing Korean baby boomers. This article, regarding housing and disposable income, aims to figure out the probabilistic characteristics of baby-boomer poverty factors so that policy implications for the ageing house poor’s welfare can be formulated utilising panel logit analyses.