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Begin New Search Topic Inequality Content Type Policy Brief Publishing Institution Korea Institute for International Economic Policy (KIEP) Publication Year within 5 Years

1. Analysis on the Determinants of Labor Share and Its Policy Implications

Author:
Yaein Baek, Minsoo Han, Wongi Kim, and Hyunsuk Kim
Publication Date:
02-2023
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
There has been a significant decline in the global labor share, leading to numerous studies about the cause of this drop. The labor share is used as one of the main indicators of inequality because a decrease in the labor share can lead to aggravation of income inequality. This is because low-skilled workers can be greatly affected by such a decline in the labor share and the main source of in-come for the low-income class, including the self-employed, is labor income. Among various indicators of inequality, this study analyzes the determinants of the change in labor share. Technological changes such as adoption of robots, advancements in information and communications technology (ICT) and the Fourth Industrial Revolution (4IR) are expected to change the labor market. Hence, this study analyzes the impact of technological changes on labor share and suggests policy responses.
Topic:
Economics, Science and Technology, Labor Issues, and Inequality
Political Geography:
Global Focus

2. The Impact of Immovable Property Tax on the Macro Economy

Author:
Young Sik Jeong, Eunjung Kang, Jinhee Lee, Kyunghun Kim, and Jeehye Kim
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Since the 2008 global financial crisis, inequality has been increasing worldwide. In particular, wealth (asset) inequality is getting worse than income inequality. And Korea is no exception. This deepening of inequality is more worrisome in that it leads to inequality of opportunity while suppressing movement between classes, which in turn deepens inequality, creating a vicious cycle of inequality. This is a bigger problem than the inequality itself. The international communities are calling for stronger property taxes, including recurrent taxes on immovable property, as part of mitigating inequality and promoting inclusive growth. In Korea, there is heated discussion on property taxes, such as recurrent taxes on immovable property including the comprehensive real estate tax. Therefore, this study aims to investigate policy directions in international organizations and major countries on immovable property tax and examine the effect of property tax on the macro economy. This study examine international comparisons of immovable property tax burdens using OECD data. Next, this study analyzes the effect of immovable property tax on housing prices, inequality, and economic growth. Finally, we suggest policy implications to Korea through this. Based on our results, we present policy implications for Korea.
Topic:
Inequality, Tax Systems, Macroeconomics, and Wealth
Political Geography:
Asia and South Korea

3. Achieving Inclusive and Innovative Growth with Competition Policies

Author:
Minsoo Han and Subin Kim
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
In recent years, inequality has grown worse worldwide. Recent studies have pointed out weakening market competition and deepening industrial concentration as one of factors for this phenomenon. Therefore, the role of competition policies in promoting market competition should also be considered as a countermeasure against deepening inequality beyond the traditional view about competition policies. Against this backdrop, we empirically analyze cases of the US, the EU and Korea, and then propose a competition policy direction to achieve inclusive and innovative growth pursued by the Korean government.
Topic:
Inequality, Economic Growth, Innovation, Inclusion, and Economic Competition
Political Geography:
South Korea, United States of America, and European Union

4. The Effects of Increased Trade with China and Vietnam on Workers’ Earnings and Job Security in Korea

Author:
Kyong Hyun Koo
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This study empirically demonstrates that changes in trade structure caused by the rise of China and Vietnam over the last 20 years have had a significant impact on the widening of the income and employment stability gap for Korean workers. An important policy goal for Korea, which is heavily reliant on trade, is to ensure that the benefits of trade and openness are distributed evenly to all classes of society while minimizing the harm. In order to achieve the policy goal, the analysis results of this paper show that it is necessary to institutionalize a systematic process for monitoring changes in Korea's trade structure and preparing response policies from a mid- to long-term as well as a short-term perspective. Furthermore, the results indicate that policy efforts are required to identify blind spots where existing trade adjustment assistance policies, employment insurance systems, and vocational training policies do not adequately protect or support workers, and supplement and improve them. More follow-up research is needed to gain a better understanding of the mechanism by which external trade shocks are transmitted to the domestic labor market in order to develop more effective domestic supplementary measures for trade shocks.
Topic:
Labor Issues, Employment, Inequality, Economy, Trade, and Wage Income
Political Geography:
China, Asia, South Korea, Vietnam, and Southeast Asia

5. The Determinants and Welfare Implications of Labor Share

Author:
Sungbae An, Minsoo Han, Subin Kim, and Jinhee Lee
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The decline in labor share is recognized as a global phenomenon. Concerns have been raised that this trend will exacerbate the income inequality between business owners as capitalists and households as the labor suppliers, prompting a decline in household income and consumption, which are major driving forces for sustainable growth. Meanwhile, various policy measures have been introduced to raise the labor share, with the aim of correcting inequality and boosting growth. This study explores the determinants of labor share and analyzes the effects of these factors on the economy and social welfare, offering various interpretations and policy alternatives according to economic conditions.
Topic:
Labor Issues, Inequality, Economy, Business, and Welfare
Political Geography:
Asia and Korea

6. COVID-19 and the Exacerbation of Gender Inequality: How the Pandemic Disproportionately Affected Women around the World

Author:
Jennifer Dikler
Publication Date:
12-2021
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The gender wage gap, or the idea that women have historically and consistently earned less than men, has been widely studied and accepted over the past few decades. This gender wage gap exists globally and serves as a powerful indicator of the gender inequality experienced by women. As of 2019, according to data amassed by the Organization for Economic Cooperation and Development (OECD), South Korea’s gender wage gap among full-time employees is the largest among the countries that make up the OECD, coming in at 32.5%. Japan was second at 32.5%, followed by Mexico, the United States, and Canada at 18.8%, 18.5%, and 17.6%, respectively. Notably, in countries with higher levels of racial diversity, the gender wage gap is usually significantly exacerbated for women of color. Despite narrowing in recent years, the gender wage gap is extremely stubborn, and very much existent, as is the general global gender inequality that it reflects. In the past 18 months, the world's population and the global economy have been significantly upended by the COVID-19 pandemic. The virus has affected virtually every country in the world, especially nations with fewer resources to help combat its spread. Studies are also beginning to confirm that COVID-19 has had a disproportionate economic effect on women in many countries, amplifying the gender inequality that persisted in the global economy even prior to the pandemic. For example, as outlined in a study published by McKinsey in July 2020, “Women make up 39 percent of global employment but account for 54 percent of overall [COVID-19- related] job losses” (Madgavkar et al. 2020). However, the widening of the gender gap during the pandemic has been far from universal, with some countries seeing the opposite results. This brief seeks to provide an initial exploration, specifically highlighting how variably the pandemic has affected the United States, South Korea, El Salvador, Guatemala, Nicaragua, the Honduras, Australia, the United Kingdom and Germany. When it comes to global gender equality, where progress is so essential and yet so slow, it is extremely important to explore the economic setbacks created by the pandemic. If not addressed properly, these setbacks might not only slow the fight toward gender equality, but could also slow down the global economy.
Topic:
Gender Issues, Women, Inequality, Economy, and COVID-19
Political Geography:
Global Focus