Poverty in South Korea

Poverty rate (after taxes and transfers) in South Korea equates to approximately 14.6% as of 2013

Poverty in South Korea has been in decline since the mid-20th century, particularly the absolute poverty rate. Relative poverty was also in decline until the late 1990s, but has risen since then. While only about 2% of South Koreans are affected by absolute poverty today, about 14-15%, particularly the elderly, are affected by relative poverty.

The poverty rate of elderly people in South Korea is the highest among the OECD countries
Poverty rate in South Korea (age 65+) in 2011

Choo, Park and Yoon summarizing the history of poverty in South Korea note that both absolute and relative poverty have been on decline in Korea in the period 1965-1990; concluding that "rapid economic growth during [the analyzed period of 1960s-1980s] in Korea has alleviated poverty to a great extent".[1] Philips et al. praised South Korea, noting that "South Korea has experienced one of the most dramatic declines in absolute poverty that the world has seen".[2] They note that while in mid-1950s over half of the Korean population was affected by absolute poverty, by the mid-1990s, absolute poverty had declined to only about 3.4 percent of the population.[2] Absolute poverty as of 2001 was below 2%[3] (however, another estimate for 2000 cited 11.5%[4]). However, more recent data suggests that relative poverty has been on the rise, growing from about 8% in the early 1990s to the current (2012) 15%.[5]

According to an official estimate, about 15% of South Koreans live below the poverty line.[6] Poverty in South Korea is defined as relative poverty, and operationalized as the share of the population living on less than half of the median income.[5] (Median household income in South Korea in 2007 was $19,179 (W20m).)[7]

Poverty in Korea is affecting mostly the elderly: nearly a half of the elderly live in relative poverty, which is the highest proportion among OECD countries.[5]

Reasons for poverty

OECD listed several factors among the reasons for poverty in Korea. First, public social spending in South Korea is low. Social spending by the government in South Korea was 7.6% of GDP in 2007, compared to the OECD average of 19%.[5] This can be explained by the Korean traditional reliance on family and the private sector to provide such services.[5] Second, Korea’s dualistic labour market, in which a significant number of workers are hired only on temporary contracts with low wages and benefits, results in high inequality in wage income.[5]

See also

References

  1. ↑ Korea: Poverty in a Tiger Country, Hakchung Choo, Soon-Il Bark, and Suk Bum Yoon, POVERTY: A GLOBAL REVIEW Handbook on International Poverty Research, 1996, UNESCO
  2. 1 2 Phillips, R., Hulme D, Kim E M, Henderson J. 2002. Economic Governance and Poverty Reduction in South Korea. Report to the DFI
  3. ↑ Anis Yusal Yusoff, POVERTY LINE the experiences of others
  4. ↑ Yeon-Myung Kim, Towards a Comprehensive Welfare State in South Korea
  5. 1 2 3 4 5 6 OECD Economic Surveys of Korea, April 2012
  6. ↑ "Central Intelligence Agency". Cia.gov. 2009-10-20. Retrieved 2013-01-18.
  7. ↑ Society at a Glance 2011 - OECD Social Indicators, OECD, 12 April 2011.
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