A new approach to social inequality: inequality of income and wealth in South Korea

Abstract This paper attempts to provide a new approach to social inequality, focusing on income and wealth inequality and the relationship between income inequality and wealth inequality. With an analysis of the data linking survey data with administrative data in South Korea, this paper reports that wealth, employment status, family size, and education are significant contributors to income inequality. However, income and loans are the two most significant factors contributing to wealth inequality. Income derived from economic activity and loans based on the leverage in the financial market have exacerbated wealth inequality as higher income groups tend to utilize more loans in the financialized economy, widening the gap between the rich and the poor. Wealth inequality has different dynamics from income inequality, mediated through leverage in South Korea.