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Poverty in South Korea has been in decline since the mid-20th century, particularly the absolute poverty rate. Relative poverty was also in decline until the late 1990s, but has rose since then. While only about 2% of South Koreans are affected by absolute poverty today, about 14-15%, particularly the elderly, are affected by relative poverty.
Contents
Trends
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". 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". 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. Absolute poverty as of 2001 was below 2% (however, another estimate for 2000 cited 11.5%). However, more recent data suggests that relative poverty has been on the rise, growing from about 8% in the early 1990s to the current (2012) 15%.
According to official estimates, about 15% of South Koreans live below the poverty line. Poverty in South Korea is defined as relative poverty, and operationalized as the share of the population living on less than half of the median income. (Median household income in South Korea in 2007 was $19,179 (W20m).)
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.
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%. This can be explained by the Korean traditional reliance on family and the private sector to provide such services. 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.