Income Redistribution Structure of the Korean Economy: A Social Accounting Matrix Perspective (in Korean)

Yong-Hwan Noh ()
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Yong-Hwan Noh: Institute for Monetary and Economic Research, The Bank of Korea

Economic Analysis (Quarterly), 2006, vol. 12, issue 2, 67-106

Abstract: This paper uses the disaggregated nature of a Social Accounting Matrix (SAM) to analyze the income redistribution structure of the Korean economy. I explicitly construct a schematic structure of an ‘aggregated SAM’ (Macro SAM) based on a mapping of the economy-wide circular income flow. The Macro SAM reports values that are consistent with the 2000 National Accounts. I then disaggregate selected accounts of the Macro SAM using Input-Output tables and Korean Household Income and Expenditure Surveys. In particular, households have been disaggregated by yearly income decile. I identify the changes in the relative income of economic agents due to the multiplier process of the linear general equilibrium model. First, I find that low-income households benefit relatively less from all production activities, and that they benefit relatively less from an equivalent income increase for all household income classes. Second, I analyze the role of government in income redistribution. It is found that short-term government intervention targeting the underprivileged, such as the current Korean National Basic Livelihood Act , which entered into effect from October 2000, makes a positive contribution to low-income households, while it has a negative effect on production activities and high-income households. Third, by introducing the government as an endogenous account in the model of multipliers, is observed that the income inflows in public service areas such as education, health and social work generate gains in the relative income of households except for those in the lowest decile income group.

Keywords: Social Accounting Matrix; Income Redistribution; Government Transfer (search for similar items in EconPapers)
JEL-codes: C63 D59 H59 (search for similar items in EconPapers)
Date: 2006
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