This paper explores the rising debt among the middle class in South Korea in the 21century, analyzing the Household Finance and Welfare Survey data collected by Statistics Korea from 2010 to 2020. The two economic crises, the global financial crisis in 2008/2009 and the COVID-19 pandemic in 2020, have resulted in the rising indebtedness of the middle class. While the global financial crisis in 2008/2009 rendered the rise of debt of the lower middle class, the COVID-19 pandemic has generated the rapid expansion of liquidity of the middle class as the government switched from austerity to expansionist measures in the financial market. The middle class has responded to the policy change by borrowing money from banks to invest in the overheating real estate market. In particular, the sharp increase in liquidity due to counter-measures has contributed to the rising indebtedness of the middle class. The increasing debt to the disposable income of the middle class will seriously threaten the indebted middle class in South Korea. In particular, the lower middle class may face downward mobility with financial hardship as the interest rate sharply rises following the global inflation trend. The instability of the job market and financial market will lead to the volatility of the Korean middle class in the 2020s.

Kwang-Yeong Shin, CAU Fellow in the Department of Sociology at the Chung-Ang University, Seoul, Korea, graduated from Chung-Ang University, Seoul, Korea. His research interests are social class, inequality, and welfare from a comparative perspective. He has been working on the variegated combination of the labor market institutions and welfare policy in shaping social inequality. His most recent publications include Swedish Social Democracy: Labor, Welfare, and the Politics (2015) and Precarious Work in Asia: Global Capitalism and Work in Japan, South Korea, and Indonesia (2021) coauthored with Arne L. Kalleberg and Kevin Hewison.