A 2023 mid-term, and a gap chosen as a social risk

The assignment, from the second semester of the 2023 academic year, stands under the heading that social welfare is a public response to a social risk. The writer is to choose one field, present one indicator that can describe its present state, and set out later tasks for improvement. Income inequality is the field chosen.

A gap between rich and poor is defined as a calculated relation — a ratio, a coefficient, a difference — between average incomes and average wealth, inside a given place and time, following a set rule. It is also described as an imbalance of redistribution, and as a real gap in what people hold, born of different social, political, economic, and cultural positions. In a narrower economic use, an income difference is a gap in receipts over a period, reflecting a person’s labour and a society’s distribution policy, and often appearing as wages and allowances, goods and welfare, housing and medical insurance. A gap between rich and poor, on this account, is what follows when a large income difference has been crossed and then accumulated. Human capital, built through good education, is named as one main way to narrow an income gap, and low-income households are said to meet more difficulty in reaching higher education.

A 4.7-point claim from 2015, and a 2014 argument about redistribution

An OECD paper from 2015 is cited for an estimate that the rise in income inequality between 1985 and 2005 reduced cumulative growth between 1990 and 2010 by 4.7 percentage points. The gap between low-income households and the rest is treated, in that citation, as a main source of the rise. In countries where inequality is already high, the writer adds, a gap in opportunity deepens, and that gap itself becomes a cause of further inequality. Ostry, in 2014, is cited for the view that focusing on growth and leaving inequality to be solved is mistaken, because growth may then be low and hard to sustain, and that average redistribution tied to a reduction of inequality is associated with higher, more durable growth. Inequality produced by an economic policy, on that argument, can undermine the very growth the policy set out to promote. Those claims are left in 2014 and 2015, not recast as a later official finding. Tracking the degree of income inequality and its course is treated as important, because a deepening gap can hinder activity and growth and can also stir social conflict and unease.

A 2016 Gini of 0.304 or 0.355, depending on the survey, and a tax comparison

The indicator chosen is the Gini coefficient, described as the measure most often used for imbalance, inequality, and polarisation. It was devised in 1912 by the Italian statistician Corrado Gini, as a figure for the income gap between strata. Zero is read as complete equality of income or wealth; the closer the figure to one, the larger the inequality. For 2016, on equivalized disposable income that takes household size into account, and for all households nationwide, including one-person and farm households, the Household Income and Expenditure Survey is given as 0.304, and the Household Financial Welfare Survey, supplemented with administrative data, as 0.355 — a larger figure. Both series, this reading says, declined a little after 2011 and then rebounded slightly in 2016. A comparison of market income, before tax, with disposable income, after tax, is used to gauge the redistributive effect of government tax policy. Market-income Gini is given as 0.418 in 2011 and 0.402 in 2016; disposable-income Gini as 0.388 and 0.355. Those figures stay in 2011 and 2016; they are not recast as a later official total. Among the later references are Kim Min-jeong’s 2022 master’s thesis at Yonsei, on a model simulation of how an income tax eases income inequality, and Park Hyun-ah’s 2022 master’s thesis at Seoul National University, on young people’s sense of fairness about income inequality. The same Korean report, at fuller length, is on CampusDown.

Sources

1. A mid-term assignment from the second semester of the 2023 academic year, under the heading that social welfare is a public response to a social risk, choosing income inequality as the field.
2. OECD (2015), as cited, on an estimate that the rise in income inequality between 1985 and 2005 reduced cumulative growth between 1990 and 2010 by 4.7 percentage points; Ostry (2014) on redistribution and durable growth, left in those years.
3. Gini coefficient, devised by Corrado Gini in 1912; Korean figures for 2011 and 2016 from the Household Income and Expenditure Survey and the Household Financial Welfare Survey, including market-income and disposable-income comparisons, left in those years.
4. Kim Min-jeong, Yonsei master’s thesis, 2022; Park Hyun-ah, Seoul National University master’s thesis, 2022.

Last updated: 14 November 2026