We examined the relative contributions of government income support programs and familial transfers to old-age income security in Korea. This issue is critical, as policy reforms are in progress, and the potential crowding-out effect of government programs on familial transfer is at the center of heated debate. Using the 2006 Korean Longitudinal Study of Aging, we found that one-third of the elderly were poor and the contribution of public transfer to income security for the elderly was limited, whereas family, especially children, played a large role both by co-residing and through private transfers. Crowding out is less of a problem for the poor but a sensitive issue for middle-income families.
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