The Korea Herald

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Bankruptcy by self-employed seniors on rise: data

By KH디지털2

Published : Jan. 9, 2015 - 12:28

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The portion of self-employed seniors who have gone bankrupt is trending higher due to excessive competition, data showed Friday, raising alarm as a growing number of babyboomers among them are opting to start their own businesses after retirement.


Some 75.3 percent of self-employed businesses that went belly up last year were run by those aged over 50, compared with 70.6 percent in 2011, according to the data by the Korea Financial Telecommunications & Clearings Institute.


Of the total, those aged between 50-59 accounted for 42.7 percent, followed by those aged over 60 with 32.6 percent. The age segments represent the generation of Korean babyboomers who were born in 1955-1963.


The data comes as babyboomers, who worked their way through the heyday of South Korea's economic growth, are opening their own businesses out of financial need.


Separate data by Statistics Korea showed that the portion of those aged over 50 accounted for 57.6 percent of all self-employed in 2014. In 2007, the figure stood at 47.5 percent.


Market watchers, however, have raised concern on the trend as most babyboomers tend to open bakeries or delis that already face stiff competition due to market saturation.


"Most seniors involuntarily start their own businesses as they have no other option to prepare for life after retirement," said Kim Kwang-seok, a senior researcher at Hyundai Research Institute. "However, many of them go bankrupt as they enter sectors where profit is waning due to excessive competition." (Yonhap)