Economic bipolarization and its effects on the Korean economy and society

Chapter 5 investigates the causes, effects, and remedial measures of income bipolarization, which is one of the most critical economic and social issues in Korea. Income bipolarization has serious adverse impacts not only on the country’s economic growth, but also on various spheres of society, including social justice, trust, and conflict. Income bipolarization begets education and health bipolarization in Korea, which hinders social mobility and exacerbates income inequality, indicating a vicious circle between income and social bipolarization. It follows that Korea’s current state of socioeconomic bipolarization is untenable for its sustainable social and economic development. Not only to cut the vicious circle, but to enhance social justice in the sense of Rawlsian ethics, redistribution should expand in Korea. The causes of income bipolarization identified suggest policy proposals including the mitigation of dualism in the labour market and the wage gap between workers for chaebols and SMEs as well as an expansion in social spending to the OECD average.