NABO Industry Trends and Issues (No. 17)
Published on 26 February 2018
Published by Industry & Employment Analysis Division of the Economic Analysis Bureau
I. Industry, Trade, Industrial Loans and Energy Market Trends
(Employment) The number of employed people in January 2019 increased by 19,000, among which 3,000 were youths. The number of employed people in the services industry in January decreased by –1.0%, (MoM), but increased by 0.5% (YoY).
(Population) As of end-December, the registered population of Korea 2018 is 51.83 million, an increase of 50,000 (0.09%, YoY). Reasons for the recent super-low birth rate include the decreased population of people in their late 20s and early 30s as well as the lower marriage rate.
(Pension) In the third quarter of 2018, the National Pension Service (NPS) fund increased (YoY) mainly due to increased corporate and voluntary (continuous) subscribers, whereas the retirement pension fund increased (YoY) mainly due to the increased number of subscribers to the Defined Benefit and Defined Contribution plans. The number of NPS subscribers increased by 0.2% (YoY), and the fund volume increased by 6.7% (YoY).
Ⅱ. Estimation of the Extension of Essential Roads in North Korea
If the two Koreas were to take advantage of the South Korean development experience and fully collaborate to build transport infrastructure in North Korea, it was determined that railways would need to be modernized and roads would need to be extended. As such, this report has estimated the length of essential roads that need to be built in North Korea. Based on a coefficient drawn from a regression equation between the South Korean per-capital nominal GNI trend and the value of road extension per national coefficient (drawn from land size and population), this report has calculated the length of essential road expansions appropriate for the current per-capital GNI status of North Korea and concluded that the regime requires an additional 15,942km of roads. Therefore, if North Korea builds road infrastructures at the level of its current income via inter-Korean economic partnerships, it is expected to produce positive effects on both the North and South Korean economies.
Ⅲ. Impact of Senior Citizens’ Incomes and Assets on Consumption
Recently, the spending patterns of senior citizens in Korea have dropped sharply compared to that of the middle-aged population. An impact analysis of the income and assets of aged households on consumption conducted through panel research documents for a study of aging (2006-2016) concluded with an income elasticity of expenditures at 0.19 and a wealth elasticity of expenditures at 0.08. It was noteworthy that in terms of senior citizens’ expenditures, labor income had a greater impact than wealth income, public net current transfers had a greater impact than private net current transfers, and real estate assets had a greater impact than financial assets. Therefore, as the population ages, overall expenditures are likely to decrease unless there is a significant change in future incomes.
Ⅳ. Impact of Household Types on the Type of Housing Tenure
The number of households in Korea is expected to decrease from 2044, while the proportion of single and two-person households as well as aged households is expected to significantly increase. An impact analysis of the type of household on type of housing tenure according to the Population and Housing Census (1995~2015) concluded that married households are more likely to live in self-owned homes than non-married households, while both single and aged households are less likely to live in self-owned homes than multi-person or non-aged households. As the decline in marriage rates, ever smaller families and population aging trends are expected to affect the owner-occupancy ratio, the changing characteristics of households need to be considered when establishing housing policies such as housing supply strategies.