Identifying the Potential Influences on Income Inequality Changes in Korea - Income Factor Source Analysis

39 Pages Posted: 18 Jul 2007

See all articles by Younguck Kang

Younguck Kang

KDI School of Public Policy and Management

Date Written: June 2007

Abstract

This study attempts to measure what effects the direction and size of contributions of a number of different income sources at the household level has on the changes in inequality indexes in Korea between 1988 and 2002. Based on the Urban Household Income and Expenditure Survey (UHIES) from the National Statistics Office (NSO), it is found that the household head wage income has a decreasing effect on inequality, whereas the wage income from spouses and other members of households seem to increase the level of inequality at the household level, where the magnitude of such an effect on market income inequality is far smaller than that of the household head wage income. However, due to the inherent limitations of UHIES, generalizing the empirical findings to all types of households becomes questionable. The analytical tool used in this study is based on Shorrocks' natural decomposition method (1982, 1983) and Lerman and Yitzhaki's (1985) Gini decomposition method.

Keywords: Inequality, Decomposition, Income source

JEL Classification: D33, E25, H55, I32, J30, N35

Suggested Citation

Kang, Younguck, Identifying the Potential Influences on Income Inequality Changes in Korea - Income Factor Source Analysis (June 2007). KDI School of Pub Policy & Management Paper No. 07-07, Available at SSRN: https://ssrn.com/abstract=994766 or http://dx.doi.org/10.2139/ssrn.994766

Younguck Kang (Contact Author)

KDI School of Public Policy and Management ( email )

P.O. Box 184
Seoul, 130-868
Korea, Republic of (South Korea)

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