Impacts of the COVID-19 crisis on single-person households in South Korea

Haeil Jung; Jun Hyung Kim; Gihyeon Hong

doi:10.1016/j.asieco.2022.101557

Impacts of the COVID-19 crisis on single-person households in South Korea

J Asian Econ. 2023 Feb:84:101557. doi: 10.1016/j.asieco.2022.101557. Epub 2022 Nov 11.

Authors

Haeil Jung¹, Jun Hyung Kim², Gihyeon Hong³

Affiliations

¹ Department of Public Administration, Korea University, 145 Anam-Ro, Seongbuk-Gu, Seoul 02841, South Korea.
² Institute of Economic and Social Research, Jinan University, No. 601 West Huangpu Road, Tianhe District, Guangzhou, PR China.
³ Center for International Development, Korea Development Institute, 263 Namsejong-ro, Sejong-si 30149, South Korea.

Abstract

Using nationally representative income and expenditure data from South Korea, we show that single-person households suffered a much greater decrease in household income and expenditure compared to multi-persons households during the COVID-19 pandemic in 2020. Negative effects on income were largest for the single-person households in ages 50-64, mostly driven by decreases in earned income rather than business income. There was no corresponding decrease in consumption expenditures, however, other than on transportation expenditure for young men. Notably, there were significant decreases in non-consumption expenditures that are related to formal and informal consumption-smoothing mechanisms, such as spending on insurances, pensions, and household transfers. Our findings highlight the disproportionately negative effects of the COVID-19 pandemic on the middle-aged single-person households. With reduced spending on consumption-smoothing mechanisms, this group is likely to be even more vulnerable to negative income shocks in the future.

Keywords: COVID-19; Consumption; Income; Informal insurance; Single-person households.