The effect of public transfers on private transfers in Korea between 2006 and 2011 (Namhui Hwang)
South Korea has increased public expenditures for the social welfare of the elderly since considerably the mid-2000s. The Basic Old-age Pension System began supporting the low-income elderly in January 2008, and the Long-Term Care Insurance System was introduced to improve old-age health and stabilize living conditions in July of the same year. We do now know whether the elderly began enjoying a better quality of life after these systems were introduced because we do not know whether increased public transfers simply crowded out private transfers. If there was crowding out, then the economic burden simply shifted from the family to the government without improving the elderly population’s quality of life. This issue has received very little research attention. This study attempts to address this deficit by using National Time Transfer Accounts from 2006 to 2011 to analyze the effect of public transfers on private transfers in South Korea, focusing on the macro level. Although the time series is not sufficient to fully explore the relationship between public and private transfers, it can shed light on the roles of families and the government in the era of population aging.