Study: South Korea’s social mobility ladder is broken

Posted on : 2016-03-01 14:11 KST Modified on : 2016-03-01 14:11 KST
Lack of stable jobs and more precarious self-employment meaning fewer people moving up in income bracket
Social mobility through income and assets
Social mobility through income and assets

Low-income South Koreans are finding it harder and harder to rise to the middle or high-income classes through their own efforts and abilities, a recent study shows.

Just two out of every ten households saw their economic status rise through increased income and assets over a three-year period, the findings indicate.

Statistics Korea published data on Feb. 29 from an analysis of mobility for income quintiles based on data from a household finances and welfare survey between 2011 and 2014. The results showed just 23% of families rising in status over three years. Another 55.1% remained in place, while 21.8% dropped in status.

In the case of the fourth income quintile, with 2014 earnings between 48 million and 72.3 million won (US$38,800-58,400), 33.8% of households declined in status - 11.4 percentage points more than the 22.4% who rose. Declines also outweighed rises by 6.1 and 4.7 percentage points for households led by people over 60 and the self-employed. It’s a sign of how chronic societal problems of increasingly unstable jobs, deepening poverty among seniors, and the prevalence of small-scale self-employment have hampered rises in income class.

Social mobility through real estate and other assets were similarly difficult. Upward mobility in terms of net asset (assets minus liabilities) segment stood at just 18.7% between 2012 and 2015. Another 63.1% remained stagnant; 18.1% saw their net assets decrease. As with income, asset declines outnumbered rises for the fourth quintile (assets of 229 million to 429.2 million won in 2015, or US$185,000-346,800) and households headed by people over 60 and the self-employed.

The latest findings were mostly consistent with the results of a survey on public perceptions published by Statistics Korea in late November. There, just 21.8% of South Koreans reported feeling upward mobility was possible through their own efforts.

While samples and survey methods vary, signs that the ladder up is broken are all around. Data published by the Korea Institute for Health and Social Affairs (KIHASA) last year show the rate of upward mobility from low income to middle class falling from 32.36% in 2007 to 22.6% in 2014.

Difficulties moving up have the effect of sapping social vitality and pose obstacles to unity and economic growth. In a recent report titled “Social Unity in South Korea: A Diagnosis and Response Plan,” KIHASA researcher Yeo Yoo-jin wrote, “What allowed South Korea to reach the ranks of the advanced economies so swiftly and dynamically in the past was in large part the hope of upward mobility.”

“Now, increasingly entrenched patterns of ‘inheritance’ of academic, professional, and income status are resulting in lower class mobility,” Yeo observed.

“What is needed is the creation of good jobs to achieve fair distribution in the labor market and policies to strengthen the social safety net (welfare services) significantly to help reduce inequality.”

By Kim So-youn, staff reporter

Please direct questions or comments to [english@hani.co.kr]

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