The impact of the 1997 financial crisis on intergenerational transfers in Korea using the national transfer accounts

Chong-Bum An, Sungkyunkwan University
Eul-Sik Gim, Gyeonggi Research Institute (GRI)
Namhui Hwang, Sungkyunkwan University

National Transfer Accounts (NTA) provides estimates of economic flows across age groups. In this paper, we attempt to apply the NTA to Korea in 1996 and 2000 and show the changes in the intergenerational transfers before and after financial crisis in 1997. First, the role of asset reallocation of the aged increased largely after financial crisis and that of transfers decreased. Second, public transfer was increased after financial crisis while private transfer was reduced, and the changes in the aged were bigger than that of the young. Third, in terms of expenditure, the reduction in spending of the aged was larger than that of other age groups; on the contrary public health spending was increased. Fourth, the role of labor income in retirement era is decreasing.