Korea ranks second from bottom of OECD for income redistribution

Korea ranked near the bottom of Organisation for Economic Cooperation and Development (OECD) member states in income redistribution through taxes and welfare systems, latest data showed Sunday.

Korea's improvement rate in the Gini coefficient was 17.6 percent in 2023, the latest year for which OECD data is available, according to an analysis by Yonhap News Agency.

The measure compares the Gini coefficient for market income before taxes with that for disposable income after taxes and transfers.

The figure was about half the OECD average of 34.4 percent, ranking Korea 28th among the 29 OECD member countries with available data. Only Costa Rica ranked lower, at 12.1 percent.

The findings come as the Korean economy has entered an expansionary phase on strong semiconductor exports, while concerns remain that economic polarization could become entrenched.

The Gini coefficient measures income inequality, with zero representing perfect equality and one representing perfect inequality.

Korea's market-income Gini coefficient in 2023 was 0.392, the lowest among the 29 OECD countries compared, indicating the highest level of equality. Its disposable-income Gini coefficient was 0.323, however, leaving the country ranked 22nd after taxes, pensions and benefits were taken into account.

"The results show that Korea's income redistribution through taxes and other measures is relatively weak compared with other OECD countries," said Kim Kwang-seok, a researcher at the Institute for Korean Economy & Industry.

He called for stronger government support for low-income households.

Yonhap