A report released on March 19 by the Korea Institute for Health and Social Affairs, titled “Why Do People Feel Inequality Is Severe?”, highlighted the discrepancy between statistical data and public perception, according to The Korea Times.
The study found that the country’s Gini coefficient a key measure of income distribution where a lower figure indicates less inequality declined from 0.418 in 2011 to 0.392 in 2023.
This official indicator, compiled by government statistics authorities, suggests that expanded welfare policies such as pensions and public benefits have helped reduce income disparity on paper. However, public sentiment has moved in the opposite direction during the same period.
Low-income households, in particular, believe that the gap between themselves and high-income groups is widening, even when their actual income has increased. The report points to the rising cost of living as the primary cause.
Since food is a non-negotiable expense regardless of household budget, it takes up a larger share of income for poorer households, making economic inequality feel more pronounced.
Beyond daily necessities, household net assets also significantly influence perceptions of inequality. The report found that individuals with greater asset ownership tend to perceive lower levels of inequality.
For middle-income households, real estate plays a crucial role in shaping this perception. Those who do not own homes report feeling a stronger sense of disparity, largely due to the difficulty of entering the housing market.
In contrast, property ownership has less impact on how low-income groups perceive inequality. Instead, liquid assets such as bank savings play a more important role in shaping their economic outlook.
To address public concerns, the research institute recommended targeted support based on income levels.
For low-income groups, the report emphasized expanding food assistance programs and strengthening emergency welfare systems to prevent households from falling into debt.
For the middle class, researchers suggested increasing housing supply and expanding financial support for first-time homebuyers.
Sources: Znews