Asset Inequality Overshadows Income Disparity in Korea

At a recent seminar hosted by the Nam Duck-woo Memorial Foundation at Sogang University, Jang Yong-seong, a member of the Monetary Policy Committee (MPC) of the Bank of Korea, highlighted a concerning trend in South Korea's economic landscape. While income inequality shows signs of improvement, asset inequality, particularly in real estate, is becoming increasingly problematic.

Jang referenced data from the World Inequality Database (WID) Gini coefficient, noting a gradual improvement in income inequality from 2002 to 2022. However, he emphasized the growing concern over asset inequality, which is not being adequately addressed. The lack of mobility between income classes in South Korea further exacerbates the issue, making the improvement in income inequality less perceptible to the general population.

Comparing the situation with the United States, Jang pointed out that despite higher income inequality, the U.S. benefits from greater class mobility, with a significant number of the wealthiest individuals being self-made entrepreneurs. This contrasts sharply with South Korea, where only a small fraction of the wealthy are first-generation entrepreneurs, highlighting the barriers to upward mobility and the urgent need for policy interventions to tackle asset inequality.