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The dynamics of income inequality in Korea

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Frame of Image gs have important policy implications. In order to raise the overall economic status, policy efforts should be exerted to create more stable employment opportunities with better compensation. Also called for is more active policy intervention to increase the transfer payment. The nature of tax policy is also important. Despite the government’s claim that the recent tax cuts are not for the rich, to the extent that the tax cuts are implemented differently across income distribution in favor of the rich, the income inequality will persist. It is encouraging that in 2010, the Gini coefficient, quintile ratios, and relative poverty rate all improved for the first time since 2006. However, it is too early to tell whether or not this improvement was the temporary result from the active government intervention with transfers and tax cuts. To continue this improving momentum, the pressing policy challenge now is more than implementing stronger economic policies for growth and redistribution. What is urgently needed to reduce the prevalent uncertainty and to create social and public consensus to share the economic pain and gain. Given the importance of transfer income to reduce the inequality, some form of tax raise may be inevitable. The social consensus to share “the pain and gain” will lighten the potential tax resistance from the rich and induces the poor to be more patient. Conscientious political leadership based on reality and feasibility is also needed since the public policie


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Title The dynamics of income inequality in Korea
Similar Titles
Material Type Article
Author(English)

Kim, Jongsung

Publisher

Sejong, South Korea : Korea Development Institute

Date 2011
Journal Title; Vol./Issue KDI Journal of Economic Policy Confernece:2011
Pages 26
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Financial Policy
Government and Law < Governance
Holding Korea Development Institute
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