Poverty Conditions for the Rep. of Korea in the Aftermath of the Financial Crisis

Poverty Conditions for the Rep. of Korea in the Aftermath of the Financial Crisis

by

Head Researcher: Kim, Dong-Choon

Associate Researchers: Rew, Jung-Soon, Jung, Gunh-Wha,

Jang, Se-Hoon, Huh, Sun, Noh Dae-Myung, Soan, Byung-Donn

People’s Solidarity for the Participatory Democracy(PSPD)

November 2000

Chapter 1. Introduction ………………………… 1

1. Background and Purposes ⊳ 1

2. Outline of the Report ⊳ 2

3. Data and Limitations ⊳ 3

Chapter 2. The National and Household Economy After The Foreign Exchange Crisis ………………………… 4

1. Major Economic Indicators ⊳ 4

2. Employment ⊳ 6

3. Household Economy ⊳ 8

Chapter 3. Distributional Structure ………………………… 12

1. Degree of Income Inequality ⊳ 12

1) GINI Index ⊳ 12

2) Income Gap among Different Income Groups ⊳ 13

3) Income Gap Among Age Groups ⊳ 17

2. Degree of Consumption Inequality ⊳ 17

1) Changes in expenditures GINI index ⊳ 17

2) Changes in Consumption Gap Among Income Groups ⊳ 18

3) Changes in differences Among Age Groups ⊳ 21

3. Characteristics of Income Groups ⊳ 22

1) Changes in Age of Household Heads ⊳ 22

2) Changes in Composition Rates of Household Heads with Different Levels of Education ⊳ 24

3) Changes in Size of Households and Number of

Employed ⊳ 25

4) Changes in Composition Rates According to Occupation

Groups ⊳ 26

5) Changes in Characteristics of Unemployed Households ⊳ 28

Chapter 4. Poverty Rate and Poor Households ………………………… 33

1. Estimating Methold of Poverty Rate ⊳ 33

1) Estimating Method of Absolute Poverty Line in 4-Person Households ⊳ 33

2) Household Equality Index ⊳ 34

3) Use of Consumption Expenditure as an Indicator of

Household Economic Power ⊳ 35

2. Poverty Rate ⊳ 36

1) Estimation of Minimum Cost of Living ⊳ 36

2) Poor Poverty Rate and Scope of Poverty Population ⊳ 37

3) Extreme Poverty Rate ⊳ 39

3. Living Conditions of Poor Households ⊳ 41

1) Total expenditures ⊳ 41

2) Essential expenditures ⊳ 42

3) Accessory expenditures ⊳ 45

Chapter 5. The Poverty-Stemming Effect of Unofficial Welfare Practice and Its Limits ………………………… 48

1. The Scale and Scope of Unofficial Welfare Practice ⊳ 49

2. The Poverty-Stemming Effect of Unoffical Welfare Practice

in Urban Working Households ⊳ 53

1) Poverty-Stemming Effect of private income transfer ⊳ 54

2) Poverty-Stemming Effect of Private Income Transfer According to Income Groups ⊳ 56

3. The Poverty-Stemming Effect of Unoffical Welfare Practice In Unemployed Households ⊳ 58

1) The Poverty-Stemming Effect of Private-Transfer Income ⊳ 58

2) Poverty-Stemming Effect of Private Income Transfer Among Income Groups ⊳ 60

4. Significance ⊳ 63

Chapter 6. Government Poverty Countermeasures ………………………… 63

1. Poverty Relief Measures For the Poor ⊳ 64

1) Changes in Budget ⊳ 64

2) Structural Changes ⊳ 65

2. Evaluation of the Governmental Poverty Countermeasures ⊳ 72

1) Poverty-Stemming Effects ⊳ 72

2) System Management ⊳ 75

3. Policy Improvement ⊳ 78

Chapter 7. Summary and Conclusions ………………………… 89

References ………………………… 92

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