The Bottom, the Typical, and the Top: Distribution of Incomes among Households in South Korea

Yuri Mansury, Cornell University
Hun Joo Park, KDI School of Public Policy and Management

We explore the demographic characteristics of households at the bottom and at the top of South Korea’s income distribution in 2005. At the bottom, we found poor households rely heavily on transfer incomes. At the top, well-to-do householders rely even more on labor income than a typical household, suggesting that top households were not members of the “propertied class.” While there is substantial evidence on the distributional impact of income covariates, the evidence on the impact at different segments of the income distribution is scarce. This paper sheds light on the distributional impact differentials using quantile regressions, which reveal that both anti-discrimination policies and expansion of public sector are inequality reducing. Quantile regressions also indicate that higher-education policies are inequality neutral, while measures that encourage businesses to hire workers as long-term employees are inequality enhancing.