As Disaster Relief Funds Are Released, Income Growth Rate Hits 'All-Time High'... Average Monthly Household Income Reaches 4.729 Million Won

Statistics Korea Announces 2021 Q3 Household Trends Survey Results
Average Monthly Income per Household Increased by 8.0% Year-on-Year... Highest Since 2006 Statistics
Income Growth Larger for Lower Income Groups... 1st Quintile 21.5%, 2nd Quintile 12.0%
Average Monthly Expenditure 3.5 Million KRW... Increased by 6.6%

[Sejong=Asia Economy Reporter Kim Hyunjung] Due to the government's disaster relief fund payments, the average monthly income per household in the third quarter of this year showed the largest increase since government statistics began in 2006. In particular, the income growth rate of the 1st income quintile (bottom 20% income group), where the poor are concentrated, rose by more than 20% compared to last year. Accordingly, the 5th-to-1st quintile ratio of disposable income, which indicates the degree of income inequality, recorded the lowest level since statistics began.

According to the '2021 Q3 Household Trends Survey Results (households with one or more persons, including agricultural, forestry, and fishery households)' announced by Statistics Korea on the 18th, the average monthly income per household in the third quarter of this year was 4,729,000 KRW, an 8.0% increase from the previous year. This is the largest increase since Statistics Korea began compiling related statistics in Q1 2006.

Jung Dong-myung, Director of the Social Statistics Bureau at Statistics Korea, explained, "Due to the favorable employment situation in Q3 and improvement in the service industry, both earned income and business income increased simultaneously. Additionally, public and private transfer incomes increased overall due to the September national support fund payments and the Chuseok holiday effect, resulting in an overall increase in total income."

Looking at income levels (income quintiles), the lower the income group, the larger the income increase. The average monthly income for the 1st quintile was 1,142,000 KRW, up 21.5%; the 2nd quintile was 2,647,000 KRW, up 12.0%; the 3rd quintile was 4,018,000 KRW, up 8.6%; the 4th quintile was 5,792,000 KRW, up 7.6%; and the 5th quintile was 10,037,000 KRW, up 5.7%.

Director Jung stated, "It appears that the disaster relief fund contributed more to the income increase of the lower income quintiles with relatively smaller income sizes. Also, the 1st quintile has a high proportion of elderly aged 60 and over, and the increase in elderly employment due to government public job projects and the occurrence of private transfer income such as holiday allowances influenced this situation."

By income component, earned income accounted for 62.5%, business income 18.7%, transfer income 17%, non-regular income 1.3%, and property income 0.5%. Earned income was 2,954,000 KRW, up 6.2%, and transfer income, which includes disaster relief funds, was 804,000 KRW, up 25.3%. On the other hand, property income decreased by 23.9% to 24,000 KRW. Statistics Korea explained, "This appears to be due to a decrease in income such as interest and dividends. However, since property income amounts are small and the coefficient of variation is also high, it should be viewed carefully."

Expenditure averaged 3.5 million KRW per household per month, up 6.6% from last year. The composition of expenditure items is as follows: food and non-alcoholic beverages (16.9%), food services and accommodation (13.9%), transportation (11.3%), housing, water, electricity, and gas (10.6%), health (8.8%), education (8.7%), other goods and services (8.0%), recreation and culture (5.6%), household goods and services (5.5%), communication (5.0%), clothing and footwear (4.2%), alcoholic beverages and tobacco (1.7%).

The average monthly disposable income per household was 3,773,000 KRW, up 7.2% from the previous year. The surplus amount, which is disposable income minus consumption expenditure, was 1,229,000 KRW, increasing by 12.4% during the same period. Looking at disposable income by income quintile, the 1st quintile was 910,000 KRW, up 17.7% year-on-year, and the 5th quintile was 7,748,000 KRW, up 3.8%.

The 5th-to-1st quintile ratio (based on equivalized disposable income), which shows the degree of income inequality, also improved due to income increases among the poor. The 5th-to-1st quintile ratio indicates how many times the income of the 5th quintile is compared to the 1st quintile; a larger number means greater polarization. The ratio for Q3 this year was 5.34 times, an improvement of 0.58 points from last year (5.92 times). This is the lowest for Q3 since the household trends survey method was revised in 2019, and the lowest since Q2 2020 when considering all quarters. Going back before the statistical revision, it is the lowest level for Q3 since statistics began in 2006. The 5th-to-1st quintile ratio for households with two or more persons excluding agricultural, forestry, and fishery households also improved to 4.55 times, up 0.37 points from last year (4.92 times).

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