Decomposition of regional income inequality in Korea

Abstract

This paper analyzes sources of income inequality in Korea with respect to income source and region. When the Gini index of overall income inequality was decomposed by geographical boundaries, the relative contribution of between-region inequality to the total was 67.96 percent in 1995, showing a Gini index of 0.315. Half of this income inequality (a Gini index of 0.234) was attributable to the difference in incomes between the Seoul Metropolitan Area and the rest of the nation, and two-thirds of the income inequality within regions (a Gini index of 0.101) was attributable to the level of income inequality between subregions of the Seoul Metropolitan Area.