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The Changes in the Economic Conditions of the Korean Middle income group in the 2010s

Heeju Shin (Catholic University)

There are debates on the argument that recent economic inequality created a ‘crisis’ of the middle class around the world. The size and the economic influence of the middle-income households have decreased, comparing to those of the high-income group, in many OECD countries. However, we also found that the economic realities of middle-income group vary by country. In Japan, for example, the evidences show that the proportion of the middle-income group has not decreased in recent years.

This article examines the recent changes in dynamics of middle-income group of South Korea. The questions are as follows: Is the Korean middle-income group going through crisis as many OECD countries present, or does it show a stable trend as Japan does? What’s the main issue in the economic inequality pertaining to the middle-income group in Korea?

Using the measure suggested by OECD of 2019, we define the ‘75-200% group of the national median equivalized disposable income’ as middle-income group. We also divide middle-income group into three categories (Lower, Mid and Higher Sector of the group) and look into its internal differentiation. By examining the distribution of income and wealth of the middle-income group separately during the 2010s, we conclude that the economic vulnerability of the middle-income group is evident in wealth rather than income. The steep rise in housing prices widened the wealth gap between home-owners and non-owners, which has led to an internal differentiation among the middle-income group.

Heeju Shin
Heeju Shin earned her PHD in Sociology at the University of Texas at Austin in 2008. She teaches in the department of Sociology at the Catholic University of Korea. Her main area of interests includes inequalities in health, precarious work, and poverty. She is currently working on papers about workers’ presenteeism and the effects of COVID-19 on labor market for journal publications.

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