Cohort Difference in the Association between Precarious Work Histories in Middle and Old Age and Later-Year Poverty

Background and Purpose: The labor market is a primary life-long engagement that affects later-year economic well-being. Drawing on a life course perspective, we aimed to extend the literature on work and later-year poverty by focusing on two understudied aspects. First, specific consideration to the precarious nature of work (i.e., employment status, labor income level, pension coverage) was vital to investigate the link from work history to poverty in old age. Therefore, we took a multidimensional approach to understanding a long-term, complex work history with an explicit focus on the nature of work. Second, we investigated the extent to which the long-term work patterns-later-year poverty association varies by two birth cohorts.

Methods: We utilized data from the Korean Labor and Income Panel Study (KLIPS) to study individuals at the same life stage (ages 47-62) across two cohorts: the pre-baby boomer cohort (born between 1945-1953; data from the 4th wave to the 12th wave) and the baby boomer cohort (born between 1955-1963 after the Korean War; data from the 13th wave to the 21st wave). We selected a sample of 739 pre-baby boomer males who responded to all survey years, and excluded observations with missing values for covariates and dependent variables, resulting in a final sample of 421 men. Similarly, for male baby boomers (n = 1,122), we applied the same criteria and obtained a final sample of 760 men. A multichannel sequence modeling was used to estimate simultaneously the work characteristics and pension coverage status of the participants.

Results: We observed that workers belonging to the baby boomer generation tended to remain in the labor market longer compared to those in the pre-baby boomer era, which is a trend commonly seen in affluent or developed nations. Across the two birth cohorts, we found a broadly similar pattern of long-term work history with four types: ‘Precarious-Uncovered’, ‘Self-employed-Covered’, ‘Standard-Covered’, and ‘Non-active/retired-Uncovered’. Among baby boomers, ‘Precarious-Uncovered’ were twice as likely to be poor compared to ‘Standard-Covered’, but this was not the case among the older cohort. Their median income of ‘Precarious-Uncovered’ was only about 66% of that of ‘Standard-Covered’, while the difference between the two subgroups among pre-baby boomers was smaller. ‘Precarious-Covered’ was found only among baby boomers. They were engaged in precarious work but covered by a pension scheme, which appeared to be unique to the baby boomer generation, distinguishing them from their older peers who do not have the same pension coverage.

Conclusions and Implications: The association between a higher level of education and working to an older age was found among Korean baby boomers; however, some precarious workers in this group were still poor despite having pension coverage. This co-existence of precarity, but stability in terms of pension coverage, reflects the changes in pension policies that have expanded coverage. Our findings suggest that an improved old-age income security system should prioritize vulnerable individuals by providing pension credits, rather than offering household-based subsidy programs.