Elderly people gathering at Tapgol Park in central Seoul to spend their free time. (Yonhap)
SEOUL, Feb. 9 (Korea Bizwire) — An increase in the value of assets owned by senior citizens results in a rise in the possibility of their early retirement, causing a decline in labor supply to the economy, a central bank report showed Wednesday.
According to the report by the Bank of Korea, a 10 percent increase in the value of assets such as homes owned by senior people leads to a 1.8 percentage point fall in their economic participation rate and a 6.1 percent decline in hours they worked.
Such asset value increase also raises the possibility of their retirement by 1.3 percentage points, the report showed.
The report is based on analysis of data related to prices of homes held by senior citizens aged 55-70 and their economic participation rates from 2006-2018.
The report showed that real estate accounts for around 70 percent of asset portfolios owned by people in South Korea and home ownership is particular high among senior citizens, which causes asset value hikes to have more impact on their economic participation.
The impact is more evident among men than women and salaried workers than the self-employed. In addition, the older the people become, the higher the chance that a rise in asset value leads to their early retirement, the report showed.
(Yonhap)
