COVID-19 and Age Disparity in Credit Card Expenditures in Korea: Implications on the Government Relief Fund

Abstract

This study examined the difference in expenditure behavior by age group through an empirical analysis of changes in card expenditure after the COVID-19 outbreak, using card transaction data in Korea. It also investigated whether changes in card spending reflecting changes in expenditure behavior occur because of the spread of infectious diseases. A panel analysis was employed using data from 2018 to 2020. After the outbreak, total expenditure decreased by 15.6%, with the spending of older, middle-aged, and young adults falling by 18%, 15.8%, and 14.1%, respectively. Spending on eating out declined by 24.3%, while that on eating in increased by 2.2%, a tendency that is more prominent for older adults. These findings suggest that the COVID-19 pandemic affected expenditure behavior, and the change varied by age group. This implies that the consumption-boosting effect of the COVID-19 relief fund may differ by age group with the different marginal propensity to consume.