S. Korea ranks 4th in relative poverty among OECD member states

Posted on : 2021-10-26 17:24 KST Modified on : 2021-10-26 17:24 KST
A leading cause is the rate of poverty among those aged 66 and older — a category in which South Korea ranks highest in the world
(provided by ClipartKorea)
(provided by ClipartKorea)

South Korea’s relative poverty rate was the fourth highest among members of the Organisation for Economic Co-operation and Development (OECD), according to newly released data. The cause appears to be Korea’s elderly poverty rate, which is the highest in the world.

Data provided by the OECD on Monday shows that Korea has a relative poverty rate of 16.7% (as of 2018), which was higher than all but three of the 37 OECD member states. The relative poverty rate is defined as the share of the total population that gets by on 50% of the median income or less. This means that 1 out of every 6 Koreans is in danger of falling into poverty.

As of this year, 50% of the median monthly income was 914,000 won (US$783) for a person living alone, 1,544,000 won (US$1,322) for a family of two, 1,992,000 won (US$1,705) for a family of three, and 2,438,000 won (US$2,087) for a family of four.

The only members of the OECD with a higher relative poverty rate than Korea are Costa Rica (20.5%), the US (17.8%), and Israel (16.9%). The average relative poverty rate among OECD members is 11.1%.

One of the factors behind Korea’s high relative poverty rate is its elderly poverty rate, which is the highest in the world. The relative poverty rate among Koreans of retirement age (66 years old and above) is by far the highest among OECD member states. Korea’s elderly poverty rate in 2018 was 43.4%, higher than the rate in Latvia (39%), Estonia (37.6%), or Mexico (26.6%).

Less than half (46%) of older Koreans were receiving public pension payments as of 2018. On top of that, Koreans tend to receive smaller pension payments than peers in other countries.

The OECD’s average pension replacement rate — the percentage of pre-retirement income that a pension plan pays to retirees — was 62.9% for men and 62.2% for women in the OECD. But South Korea’s national pension plan only has a replacement rate of 45.1%.

By Lee Ji-hye, staff reporter

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