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An Analysis of Characteristics and Consumption Pattern by Generation: Focusing on the post-Baby Boomers

Author Cho Hyun-seung, Lee Dong-hee, Koh Dae-young, Kim Seung-min Date 2017.12.06 Page
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The graying of South Korea is not yet as far along as it is in Japan in parts of Europe. But the pace of aging in the country has been accelerating. Korea is expected to become a super-aged society by 2025, just 25 years after the country became an aged society in 2000. Such rapid aging is creating numerous social problems, but the growth in senior-friendly industries that has occurred as a result of the increase in the elderly population is expected to stimulate domestic demand and create new jobs. In particular, baby boomers’ (those born between 1955 and 1963) consumption habits are expected to increase quantitatively and improve qualitatively as they enter old age, in sharp contrast to the current generation of the elderly. Not only will total consumption in elderly households increase, senior-friendly industries will create higher value added.

 

Although elderly consumption has been increasing in proportion to domestic consumption, the existing research on the subject does not sufficiently address the preferences and needs of the elderly in Korea. The living conditions of elderly people are relatively more complex than those of the youth, varying in terms of health, marital status, retirement status, the presence of grandchildren, and relationships with children. Thus the elderly have more diverse needs compared to younger people, and their needs are more segmented depending on the personal situation of any given individual. However, there is a major lack of basic data with which to analyze the needs of the elderly in consideration of unique situations.

 

Analyzing the future elderly population is just as important as analyzing the current elderly population. First, the baby boom and post-baby boom generations, which form the largest cohort of the Korean population, have either already begun retiring or are preparing to retire soon. Born after the Korean War between 1955 and 1963 (currently between the ages of 54 and 62), the baby boom generation consists of 7,001,333 people, accounting for 13.6 percent of the total population (as of 2015). The post-baby boom generation refers to those born between 1964 and 1974 (now between the ages of 43 and 53), who are now mostly in their 40s and early 50s. At 9,567,171 people, the post-baby boom generation is larger than the baby boom generation, accounting for 18.8 percent of the total population.

 

In Korea, virtually no research has been done to analyze and forecast the demands of the elderly population based on a categorization of the elderly population by characteristic and type. A particularly big problem is the absence of accurate analyses of the elderly population, especially considering the fact that the baby boomers and post-baby boomers are retiring or will be retiring soon. With this in mind, this study aims to analyze how Korea’s demographic changes, including the retirement of the baby boomers and post-baby boomers, will impact the country’s consumption structure.?