• KDI Journal of Economic Policy
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• v.30 no.1
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• pp.71-130
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• 2008

Using data from the Korean Labor & Income Panel Study (KLIPS), this study investigates private income transfers in Korea, where adult children have undertaken the most responsibility of supporting their elderly parents without well-established social safety net for the elderly. According to the KLIPS data, three out of five households provided some type of support for their aged parents and two out of five households of the elderly received financial support from their adult children on a regular base. However, the private income transfers in Korea are not enough to alleviate the impact of the fall in the earned income of those who retired and are approaching an age of needing financial assistance from external source. The monthly income of those at least the age of 75, even with the earning of their spouses, is below the staggering amount of 450,000 won, which indicates that the elderly in Korea are at high risk of poverty. In order to analyze microeconomic factors affecting the private income transfers to the elderly parents, the following three samples extracted from the KLIPS data are used: a sample of respondents of age 50 or older with detailed information on their financial status; a five-year household panel sample in which their unobserved family-specific and time-invariant characteristics can be controlled by the fixed-effects model; and a sample of the younger split-off household in which characteristics of both the elderly household and their adult children household can be controlled simultaneously. The results of estimating private income transfer models using these samples can be summarized as follows. First, the dominant motive lies on the children-to-parent altruistic relationship. Additionally, another is based on exchange motive, which is paid to the elderly parents who take care of their grandchildren. Second, the amount of private income transfers has negative correlation with the income of the elderly parents, while being positively correlated with the income of the adult children. However, its income elasticity is not that high. Third, the amount of private income transfers shows a pattern of reaching the highest level when the elderly parents are in the age of 75 years old, following a decreasing pattern thereafter. Fourth, public assistance, such as the National Basic Livelihood Security benefit, appears to crowd out private transfers. Private transfers have fared better than public transfers in alleviating elderly poverty, but the role of public transfers has been increasing rapidly since the welfare expansion after the financial crisis in the late 1990s, so that one of four elderly people depends on public transfers as their main income source in 2003. As of the same year, however, there existed and occupied 12% of the elderly households those who seemed eligible for the National Basic Livelihood benefit but did not receive any public assistance. To remove elderly poverty, government may need to improve welfare delivery system as well as to increase welfare budget for the poor. In the face of persistent elderly poverty and increasing demand for public support for the elderly, which will lead to increasing government debt, welfare policy needs targeting toward the neediest rather than expanding universal benefits that have less effect of income redistribution and heavier cost. Identifying every disadvantaged elderly in dire need for economic support and providing them with the basic livelihood security would be the most important and imminent responsibility that we all should assume to prepare for the growing aged population, and this also should accompany measures to utilize the elderly workforce with enough capability and strong will to work.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.12 no.10
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• pp.4359-4368
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• 2011

Among several macroeconomic missteps blamed for the recent global financial crisis including the social problems of income distribution and the lack of proper financial remedies, two of them have received particular attention: the global BOP(Balance of Payment) imbalance and the misguided monetary policy. Such BOP imbalance was blamed for massive foreign exchange investment flows from Asia into the U.S., triggering the financial and real estate bubble in America. The latter refers to the excessively loose monetary policy of the U.S. Federal Reserve, which pushed financial institutions and households into reckless investment behavior in search of higher returns. Given the abuse of certain innovative financial techniques and new investment instruments that have been created in recent decades, both collateralized debt obligations (CDOs) and credit default swaps (CDS) enjoyed a symbiotic and toxic relationship prior to the financial crisis This paper is organized as follows: The first section analyzes the real causes of the recent financial crisis. The second details the role of CDOs and CDS. Then, to identify key determinants of the CDS spreads in an emerging capital market, the sample data of major Korean firms' CDS spreads are used to estimate the risk premium by utilizing the multiple regression analysis. The empirical test result indicates that Korean 3-year treasury bond rate(TYIELD), market to book value ratio(MV/BV), and assets size(INASSETS) are shown to demonstrate statistically significant influences on the changes of the CDS premium for sample firms.

• KDI Journal of Economic Policy
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• v.33 no.4
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• pp.1-25
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• 2011

Available evidence suggests that the average marginal propensity to consume (MPC) from the 2001 tax rebate in the US was not nearly as large as that from previous tax cuts. We examine if this phenomenon can be explained by the fact that the widespread use of credit cards has made borrowing accessible for most US households by constructing a model that simulates the dynamic effect of relaxed borrowing constraints. Our model uses Kreps-Porteus preferences which account for independent measures of relative risk aversion and the elasticity of intertemporal substitution, both of which can theoretically affect the willingness to save or spend. Our model shows that the average MPC drops substantially immediately after borrowing constraints are relaxed because few consumers have binding borrowing constraints at that time. The model also shows that consumers gradually reduce their wealth after borrowing constraints are relaxed, causing more of them to have binding constraints over time, which in turn causes the average MPC to rise gradually to a new steady state value that is slightly lower than the original value. This dynamic pattern of the MPC suggests that a greater ability to borrow with credit cards could explain the lower effectiveness of the 2001 tax rebate. In addition, the model predicts that consumers choose to hold lower amounts of liquid assets for precautionary reasons when they have a greater ability to borrow unsecured debt.

• Journal of Preventive Medicine and Public Health
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• v.14 no.1
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• pp.65-74
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• 1981

This survey was made to determine the overall health situation on (1) the status of sickness; (2) the medical care utilization; (3) the medical cost in Mi-Kum Myun, Nam Yang Ju Gun, Kyung-Gi Do. The survey with questionnaire was carried out with 2,840 peoples in 560 households from August 9th to 16th, 1979. The findings from the survey were as follows; 1. Annual morbidity rate of the prolonged ill cases was 97.2 per 1,000 population (male 94.7, female 99.6), The highest age specific morbidity rate was 274.5 of the 45-to 64-year group and the lowest was 21.9 of the 5-to 14-year group. 2. Annual morbidity rate of the new patients was 777.5 per 1,000 population(male 644.5, female 909.5). 3. The chief complaints distribution of the prolonged ill cases was: local pain 36.6%, indigestion 22.4%, and coughing 7.3%, respectively, In terms of age and sex distribution, a large number of female of the 45-to 64-year group complained of local pain or general pain and a large number of both sexes of the 25-to 44-year group complaned of indigestion. 4. The major diseases of the new patients which classified with International Classfication of Diseases (I.C.D.) were disease of the respiratory system, disease of the digestive system, and disease of the musculo-skeletal system and connective tissue for male, disease of the respiratory system, disease of the digestive system, and accident, poisoning, violence for female. 5. Total ill days of the 92 new patients were 536 days and average ill days per case were $6{\pm}38.3$ days. 6. The rate of receiving treatment in the prolonged ill cases was 82.2%(medical facilities 46.4%, drug stores 27.5%, herb medicine 8.3%). 7. The rate of receiving treatment by first choice of the new patients was 88.0% (drug stores 57.%, medical facilities 28.2%, and herb medicine 2.2%), and the rate of receiving treatment by second choice was 30.9% of first treatment cases (medical facilities 44.0%, drug store 44.0% and herb meicine 12.0%). 8. Annual hospitalization rate per 1,000 population was 12.0 (male 12.0, female 11.9). 9. The locations of medical facilities utilized by out-patients were: in the prolonged ill cases Seoul or other places 66.4%, Nam Yang Ju Gun 33.6%, in cases of the new patients Seoul or other places 35.1% and Nam Yang Ju Gun 64.9% respectively. 10. The satisfaction rate of the new patients by mode of receiving treatment was: in cases of primary utilization by first choice herb medicine 100.0%, medical facilities 88.5%, and drug stores 69.8%, in cases of secondary utilization medical facilities 100.0%, herb medicine 100.0%, and drug stores 72.7% respectively. 11. The medical cost per utilized facilities was as follows; in average medical fee per case out-patient 8.947 won, in-patient 266,000 won, drug stores 1,532 won, and herb medicine 15,607 won, in average medical fee per day out-patient 4,829 won, in patient 14,178 won, drug stores 891 won, and herb medicine 4,906 won respectively. 12. The sources of the hospital charges paid out were: there own expense 50.0%, debt 35.3%, and security of medical care 14.7% respectively.