Public transfers and living alone among the elderly: A case study of orea's new income support program

Background: Despite the significant implications of older adults' living arrangements for their well-being, it is not clear whether public transfers for the elderly will increase or decrease their independent living. A few natural experiments in the U.S. show that such support increases elders' living alone owing to their preferences for privacy. There has been little quasi-experimental evidence in Asia, where multigenerational coresidence is prevalent and norms and preferences for that form of living arrangement remain strong. Objective: In 2008 the Korean government introduced the Basic Old-Age Pension (BOAP), a means-tested income support program for elders. This article examines how the program affects unmarried Korean elders' likelihood of living alone. Methods I analyze the 2005, 2007, 2009, and 2011 waves of the Korean Retirement and Income Study, a longitudinal survey of nationally representative Koreans. The analysis takes a difference-in-difference approach, which compares changes in the living arrangements of two elderly groups, one that received BOAP benefits and the other that did not. Results Overall, the program has a negative, not positive, impact on elders' living alone. A closer look reveals that the transfers helped non-coresident elders to continue living alone and prevented coresident elders from forming one-person households. Conclusions Ambivalent attitudes towards living alone in the transitional Korean society, together with the modest amount of BOAP benefits, appear to explain the mixed results. These findings are particularly relevant to other rapidly changing societies where public elder-support systems are expanding and norms of familial elder support are weakening.