July 7, 2022

South Korea’s income gap between the haves and have-nots in 2020 narrowed from a year earlier on the back of the government’s provision of emergency cash handouts amid the pandemic.

According to the data from Statistics Korea, the distribution ratio for disposable income, reached 5.85 last year, down from 6.25 the previous year, given it being a key barometer of income equality.

With the onset of the pandemic in the country last year, the government in May 2020 had given out 14.3 trillion won (US$12.1 billion) in stimulus checks to all households to help them cope with the dire situation. Each household received 1 million won that had four or more members.

The statistics agency mentioned that the proportion of income earned through public transfer accounted for 72 percent of last year’s on-year gain in household income.

Summary of the report –

• In the reporting year, the Gini coefficient measured with disposable income came in at a record low of 0.331, down from 0.339 the previous year.
• The data showed the country’s households last year earned 61.25 million won on average, up 3.4 percent from a year earlier.
• The household’s income earned through wages rose last year by 1.7 percent on-year to 38.55 million won.
• However, as the government provided emergency cash handouts, households’ public transfer income increased 31.7 percent to 6.02 million won.
• The bottom 20 percent income bracket last year earned an average of 12.94 million won, up 12 percent from the previous year.
• In the reporting year, income earned through public transfers accounted for 47.1 percent of the total earnings.
• Last year, the top 20 percent income group saw its average income rise 142.1 million won, up 2.2 percent from a year ago.
• In the meantime the average assets of Korean households exceeded 500 million won due to skyrocketing housing prices.
• As of end-March, households held an average of 525.3 million won, up 12.8 percent from a year earlier.
• In the same duration, the average debt by Korean households came to 88.01 million won, up 6.6 percent from a year earlier.
• The country’s households had average financial debt of 65.18 million won, up 7.7 percent from the previous year.