The Impact of Single Households on Local Economy: Evidence from Korea’s Demographic Trends

Hee-Seung Yang () and Sungjin Kim
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Sungjin Kim: Yonsei University

No 2022rwp-208, Working papers from Yonsei University, Yonsei Economics Research Institute

Abstract: Is the recent stagnation in population growth a threat to the economy? The answer may not be obvious if cities are losing population while gaining households. This paper unveils an important but unexplored channel for local economic growth: the rise in single-person households. We analyze the intercity relationship between the growing number of singleperson households and its impact on the local economy. To address endogeneity concerns, we predict the actual concentration of singletons using the uneven distribution of convenience store operating permits attracting one-person households. IV-2SLS results indicate that single households generate new jobs, firm entry, and a higher level of gross regional domestic product. The effect is primarily caused by industries substituting household production, meal preparation, and recreation services.

Keywords: Single-person household; Local economy; Employment; Firm entry; Gross Regional Domestic Product; South Korea. (search for similar items in EconPapers)
JEL-codes: E24 J12 R12 R20 (search for similar items in EconPapers)
Pages: 27pages
Date: 2022-11
New Economics Papers: this item is included in nep-lab and nep-ure
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