Income inequality pressures in South Korea will grow

Significance Structural economic changes have created a more challenging labour market, with growth of lower-paying jobs outpacing that of higher-paying jobs. Lacklustre government policy responses to address this issue have stoked public discontent, particularly among lower-income earners. Certain higher-income earners have meanwhile benefited from rising property prices. Impacts A widening income gap will exacerbate South Korea’s above-average suicide and elderly poverty rates. Attendant worsening of an already high household debt-to-GDP ratio could weaken economic growth prospects. Rising inequality will intensify political divisions and instability, particularly as senior officials face corruption allegations. Insufficient income could dampen private consumption.