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Income Inequality and Poverty Reduction Effects of Transfer Income: A Comparative Analysis of Farm and Forestry Household

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  • Kang, Sungho

Abstract

The purpose of this study is to analyze the effectiveness of transfer income system in Korea, in terms of income inequality and poverty reduction effects. Using ‘Family income and expenditure survey’, ‘Farm household economy survey’, and ‘Forestry household Economy Survey’, this study estimates poverty ratio and Gini-coefficients as the main indicators of the effectiveness. Main findings of the research are as follows: first, poverty ratio of farm household and forestry household is higher than general household's poverty ratio. Secondly, the poverty reduction effects of public transfer programs are the highest in farm household, forestry household, and general household. And commonly, as age is getting higher, the poverty reduction effects of public transfer programs are higher. And the poverty reduction effects of private transfer are higher than public transfer programs in only general household. These results suggest that the poverty reduction effects of public transfer programs will be higher if we include farm and forestry household. And based on these results, it is needed to supplement elder's income support system for farm and forestry household.

Suggested Citation

  • Kang, Sungho, 2011. "Income Inequality and Poverty Reduction Effects of Transfer Income: A Comparative Analysis of Farm and Forestry Household," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 34(01), April.
    • Handle: RePEc:ags:jordng:330519
    DOI: 10.22004/ag.econ.330519
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