"After COVID-19, High-Income and Middle-Class Self-Employed Decreased, Only Low-Income Increased"

Hankyung Research Institute Analyzes 'Changes in Income Levels of Self-Employed and Worker Households Before and After COVID-19'

[Asia Economy Reporter Kim Heung-soon] An analysis revealed that during the COVID-19 pandemic, the proportion of high-income and middle-income households among self-employed families decreased, while only the low-income group increased; in contrast, the proportion of middle-income households among worker families increased. There is a call to strengthen policy support for self-employed individuals, who have suffered greater damage, instead of providing universal support.

The Korea Economic Research Institute under the Federation of Korean Industries announced on the 11th that it analyzed quarterly microdata from the Household Income and Expenditure Survey by Statistics Korea for the second quarter of 2019 (pre-COVID-19) and the second quarter of this year (non-agricultural, non-fishery households with one or more members). This is the first time data analyzing how income class proportions changed by household head occupation before and after COVID-19 has been released.

Changes in Income Class Proportions of Self-Employed Households
High-income down 1.3%p, Middle-income down 1.2%p, Low-income up 2.5%p

According to the Korea Economic Research Institute, the income class proportions of self-employed households in the second quarter of 2019 were 13.1% high-income, 61.0% middle-income, and 25.9% low-income. As of the second quarter of this year, these proportions were 11.8% high-income, 59.8% middle-income, and 28.4% low-income.

After COVID-19, the proportions of high-income and middle-income self-employed households decreased by 1.3 percentage points and 1.2 percentage points respectively, while the low-income proportion increased by 2.5 percentage points. Based on the number of households, it is estimated that high-income and middle-income households decreased by 47,588 and 74,091 households respectively, whereas low-income households increased by 64,577 households.

The Korea Economic Research Institute explained, "This analysis of self-employed households uses data up to the second quarter of this year, and considering the impact of the fourth wave of the pandemic that emerged after July, the situation for self-employed individuals is likely to have worsened further."

Workers: High-income and Low-income Decrease, Middle-income Increase
Contrasting with Self-Employed

The income class proportions of worker households in the second quarter of 2019 were 11.4% high-income, 67.7% middle-income, and 20.9% low-income. As of the second quarter of this year, these proportions were 9.8% high-income, 70.4% middle-income, and 19.9% low-income.

After COVID-19, the proportions of high-income and low-income worker households decreased by 1.6 percentage points and 1.0 percentage point respectively, while the middle-income proportion increased by 2.7 percentage points. Based on the number of households, it is estimated that high-income and low-income households decreased by 176,220 and 79,999 households respectively, whereas middle-income households increased by 447,526 households.

Also, comparing the gap in low-income proportions between self-employed and worker households before and after COVID-19, in the second quarter of 2019, the low-income proportion was 25.9% for self-employed households and 20.9% for worker households, a gap of 5.0 percentage points. In the second quarter of this year, the low-income proportion was 28.4% for self-employed households and 19.9% for worker households, widening the gap to 8.5 percentage points. The gap has expanded compared to before COVID-19.

Choo Kwang-ho, Director of Economic Policy at the Korea Economic Research Institute, stated, "Based on this analysis, it was confirmed that the damage from COVID-19 was concentrated more on self-employed households than on worker households. Instead of universal support, it is necessary to strengthen measures such as tax reductions and financial support for self-employed individuals who have inevitably suffered due to COVID-19 quarantine measures. Tailored support proportional to actual damage by industry and region is required."

This content was produced with the assistance of AI translation services.