South Korea's wealth inequality is influenced by whether or not you own a home after income - South Korean report

A survey has found that inequality in household assets in South Korea has worsened every year since 2016. Previous research shows that intergenerational wealth transfers are the biggest factor influencing wealth inequality.
However, it was analyzed that gross income, whether or not a person owns a home, and housing capital gains have an even greater influence. With Dr. Kim Moon-soo of the Department of Economics, Korea University
Baek Jeong-seon, a lecturer at the Department of Economics at Hanyang University, announced on the 1st that such content will be included at an academic conference hosted by the Korean Society of Social Economics as part of the 2024 Joint Academic Conference on Economics.
Published a paper titled ``Analysis of asset inequality in South Korea - Focusing on housing.'' According to the paper, in South Korea, asset inequality is even more serious than income inequality. The net worth Gini coefficient is
It dropped from 0.619 in 2011 to 0.585 in 2016, but then rose again to 0.605 in 2023. The closer the number gets to 1, the more dissatisfied the Gini coefficient becomes.
This means that the situation is becoming more serious. In particular, the average asset per household last year was 527.27 million won (approximately 58 million yen), of which the proportion of real assets including real estate was 76.1.
%. In addition, since the majority of household debt is directly or indirectly related to housing, such as collateralized loans and rental deposits, there is a high correlation between assets and debts, and asset formation using real estate is an asset.
The analysis shows that this is contributing to the widening of industrial disparities. As a result of analyzing the Gini coefficient for total assets, real estate assets, and net assets, they are 0.58, 0.68, and 0.59, respectively, as of 2021.
It was. Both Gini coefficients have increased since 2016, and inequality has worsened. In particular, inequality in real estate assets was the highest.
The paper uses total assets, real estate assets, and net worth as dependent variables, and
The influence on the Gini coefficient of income, whether you live in the metropolitan area, whether you own multiple houses, the difference in housing capital, the amount of asset transfer between households, the age of the household head, the number of household members, and total debt as independent variables. of
analyzed. The biggest variables that affect the Gini coefficient are gross income, whether you own a home, home equity gains, total debt, age, whether you live in a metropolitan area, and intergenerational wealth transfers.
It was the order of rotation. The paper states, ``The biggest influence on total income is that income is the first factor in asset formation, and whether or not you own a house is the second largest factor.''
This reflects the large proportion of real estate assets in Japan. In particular, ``While the influence of housing capital gains tends to increase as time passes,
The impact on debt peaked in 2016, and the impact on total debt peaked in 2019, and has been decreasing." The influence of net worth on the Gini coefficient is determined by gross income, whether or not you own a home, and housing.
Capital gains, age, living in the metropolitan area, intergenerational asset transfer, and total debt were the highest. The influence of the real estate asset Gini coefficient is determined by whether you own a home, housing capital gains, total income, and total debt.
The following factors were considered: debt, age, living in the metropolitan area, and intergenerational wealth transfer. The paper states, ``Unlike total assets, whether or not you own a home has the greatest influence, and total income has the greatest influence.''
"The reason that the impact of this has become smaller reflects the fact that it is difficult to acquire real estate assets such as housing based on income alone." The paper states, ``Previous papers have shown that intergenerational wealth transfer is the most important determinant.
"However, this study added total income, including non-recurring income, and total debt to the coefficients, which increased the influence of intergenerational asset transfers."
The paper concludes, ``Taxing capital gains is not supported as the impact of housing capital gains on asset inequality is large and increases over time.
``We must do so,'' he emphasized.