Jang Yong-seong, Member of the Monetary Policy Committee, "Inequality Actually Improving... Difficulty in Perception Due to Income Mobility"

Jang Yong-seong, a member of the Monetary Policy Committee of the Bank of Korea, stated on the 14th, "The Gini coefficient of our country is actually showing an improving trend," and analyzed, "However, the reason people still feel inequality is due to income mobility (class mobility)."

Jang Yong-seong, a member of the Monetary Policy Committee of the Bank of Korea, is speaking at a seminar on seeking solutions to Korea's polarization on the 14th.

On the same day, Jang attended a seminar titled "Seeking Solutions to Korea's Polarization" held at the Gepeoteu Namdeokwoo Economics Hall of Sogang University in the afternoon, where he made these remarks.

Jang said, "According to the Gini coefficient from the World Inequality Database (WID), income inequality in Korea has been improving from 2002 to 2022. Although it worsened after COVID-19, the overall trend is improvement," adding, "When looking at after-tax income, Korea appears as the most equal country among the OECD members."

He continued, "Despite this, the reason it is not felt is largely due to income mobility," and explained, "Simply put, among the top 10 wealthy people in Korea, 2 are self-made first-generation, and 8 inherited wealth from their parents, whereas in the U.S., it is 8 to 2. In this sense, I think the inequality felt by young people is significant." He further noted, "Because of vested interests, there are many import restrictions in Korea, leading to high prices for daily necessities, which also causes a large perception gap among ordinary people."

Additionally, Jang said, "Looking at the 13 countries participating in the GRID project, income inequality has decreased in developing countries such as Argentina, Brazil, and Mexico over the past 20 years, while income inequality has worsened in welfare-heavy countries like Germany, Sweden, and Canada," explaining, "These countries share the commonality of having accepted many immigrants." He added, "It can be analyzed that growing countries tend to see some improvement in inequality, which is a result different from our preconceived notions."

The GRID (Global Redistribution Inequality Database) project is an initiative to build a database on inequality by collecting administrative data (from national tax agencies) that is close to a full census over at least 20 years under globally unified standards. Initially, 13 countries participated, and currently, a second phase involving more countries is underway. Korea has been participating since the second phase.

Jang stated, "Research on income inequality is challenging due to limited data and survey constraints. The WID also has many inaccuracies," and added, "When the GRID project is announced this year, it is expected that more accurate inequality research, including international comparisons, will become possible."

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