Korea’s income inequality rises fastest among major economies

[THE INVESTOR] South Korea’s income inequality has deteriorated to one of the world’s worst levels, data shows.

According to the National Assembly Research Service’s analysis of data from the International Monetary Fund and World Wealth and Income Database, 44.9 percent of South Koreans’ income in 2012 was earned by those in the top 10 percent.

The US, with 47.8 percent, was the only other country where the top 10 percent accounted for a larger portion of the national income. Other countries with similar level of income inequality include Singapore with 41.9 percent, and Japan with 40.5 percent, the data showed. 

In comparison, South Korean in the top 10 percent accounted for 29.2 percent of the total in 1995, showing that the country’s income inequality was relatively low. At the time, the figure for the US stood at 40.5 percent, Singapore at 30.2 percent and that of Japan at 34 percent.

However, following the Asian financial crisis of the late 1990s, South Korea’s income inequality grew rapidly, rising to 35.9 percent in 2000 and again to 43.4 percent in 2008.

While the figure for South Korea grew 15.7 percentage points between 1995 and 2012, the figure for the US rose 7.3 percentage points, Japan’s figure by 6.5 percentage points, and Singapore saw an 11.7 percentage point rise.

By Choi He-suk (cheesuk@heraldcorp.com)