Poverty in South Korea

Poverty in South Korea has been in drastic 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% of these 2% are elderly and are affected by relative poverty.

Poverty rate (after taxes and transfers) in South Korea equates to approximately 14.6% as of 2013
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 15% as of 2012.[5]

According to official estimates, about 15% of South Koreans live below the poverty line.[6] Poverty in South Korea is defined as relative poverty. Relative poverty is not the same as absolute poverty, which is a better indicator, 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] About half of all citizens over the age of 65 are living in poverty. In the last 15 years, the number of adults that have the mindset of caring for their parents has gone down from 90% to 37%.

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]

Poverty amongst Korean elderly

In the rapidly aging elderly demographic in South Korea, many require healthcare. Studies taken across many demographics concluded that South Korean elderly with low income, and lacking proper social protection for the government are the most disadvantaged. In recent years “the proportion of aged 65 and older among people with disabilities has quickly increased, from 30.3% to 43.3% in 2014”. That makes South Korea the leader in this aspect as 3 times the growth as compared to the international average.[8]

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]

Income inequality

South Korea, along with many other East Asian countries, has been known for very equal distribution of income and wealth. But this has been changing over the last couple decades. Statistics show that in the 1990s income equality reached a peak and has declined since then. This may, in part, be due an economy that, before, was expanding rapidly, has slowed down significantly.[9] In a now more competitive job market, the head of household is expected to be more educated, which makes it hard for rural families to compete with a lack of access to higher education, leading to unequal pay outside of cities. Some attribute the change in Income equality to the change in traditional head of household dynamics in South Korea, an increase in single headed households and a stiflingly low access to new jobs has created a tough spot for many families in South Korea, leading many not to have families at all.

Welfare state

South Korea has a seemingly brutal take on welfare and trade unions.[10] Many trade unions and the opposition groups they represent have been shut down by the government. It was only within the last decade that a social security has been set up for the elderly, but many elderly still live in extreme poverty despite help from the government. South Korea has, though, set up a comprehensive national healthcare for all of its citizens.

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. 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. 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.
  8. Jeon, B., Haruko, N., Soonman, K., Tomoko, I., & Nanako, T. (2017). Disability, poverty, and role of the basic livelihood security system on health services utilization among the elderly in South Korea. In Social Science & Medicine,(178), 175-183. Retrieved May 06, 2019.
  9. Ku, I., Lee, W., Lee, S., & Han, K. (2018). The Role of Family Behaviors in Determining Income Distribution: The Case of South Korea. Demography,55(3), 877-899. Retrieved May 6, 2019.
  10. Kim, T., Kwon, H., Lee, J., & Yi, I. (2011). Poverty, Inequality, and Democracy: 'Mixed Governance' and Welfare in South Korea. Johns Hopkins University Press,120-134. Retrieved May 6, 2019, from https://muse-jhu-edu.ezproxy.umuc.edu/article/444763.
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