January 05, 2013 08:12
The number of single households in Korea is expected to reach 4.71 million or one in every four households this year and increase to 5.06 million by 2015.
The proportion of one-person households is similar to Japan's 23 percent and the U.S.' 25 percent in the 1990s, but the rate of increase has been much faster. Over the last two decades, the number grew 16 percentage points, the fastest in the OECD.
This is mainly due to a rise in the numbers of senior citizens living alone as Korean society ages and younger people who opt to stay single.
Per-capita spending of one-person households tends to be higher than for families, leading to new businesses catering to them and rosy forecasts of new momentum for the economy.
But the income gap among singles is even bigger than in the general population, and low-income earners far outnumber the highly paid. This could end up crimping spending and putting pressure on the economy.
◆ Big Spenders
Singles tend to be big spenders. They are not financially bound to care for a family and end up spending money on themselves instead. According to the Samsung Economic Research Institute, one-person households in Korea spend W940,000 (US$1=W1,064) a month on average, 27.4 percent more than the W730,000 spent by households with at least two people.
That is why many believe the rise in the number single households could provide a jolt of energy for the economy. A growing number of businesses are targeting this group, such as restaurants with dividers so that people can come and eat by themselves, solo karaoke rooms, and maid services for one-person households.
◆ Polarized Incomes
But a closer look at the composition of one-person households shows a marked polarization between big spenders and those who fall into poverty because there is nobody to support them in straightened times.
According to Kookmin Bank, 8 percent of one-person households made W3 million on average a month in 2009, but 57 percent made less than W1 million.
Because of the much larger number of poor singles, an increase in their numbers could exacerbate the polarization and hamper on economic growth, experts warn.
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