The End of Egalitarian Growth in Korea: Rising Inequality and Stagnant Growth after the 1997 Crisis
Please cite the paper as:
“Lee, Kang-Kook, (2013), The End of Egalitarian Growth in Korea: Rising Inequality and Stagnant Growth after the 1997 Crisis, World Economics Association (WEA) Conferences, No. 3 2013, Conference on the Inequalities in Asia, 27th May to 12th July 2013”
This paper examines the rise in income inequality after the 1997 financial crisis and neoliberal economic restructuring in Korea. It argues that the egalitarian growth model in the past was over in Korea as inequality in income and assets became serious and economic growth has been in stagnation since then. The labor market reform, corporate and economic restructuring, and more economic opening caused a rise in wage inequality, a growing disparity between household income and corporate profit, and that between industries. The neoliberal growth model in the post-crisis period in Korea is likely to lead to a vicious cycle of rising inequality and stagnant growth through several channels, which is in the opposite direction of the East Asian miracle. This paper calls for more active efforts of the government for income redistribution and re-establishing an egalitarian growth model.