The main purpose of this paper is to compare the income inequality and welfare levels between countries selected on a worldwide basis in the 1980s. As analytical tools, Lorenz curves, the Gini coefficients and generalized Lorenz curves are used. Implicit in our analysis is the presumption that welfare is a function of the "size" of total income and distributional equality. This study makes it possible to observe the welfare levels of the selected countries by combining real GDP per capita with income decile. It thus contributes to increasing our understanding of household income inequality and welfare levels in the 1980s. Data for this study is from the "Households Income and Expenditure Statistics, 4th edition" (HIES), one of a series published by the International Labour Organization.
This paper deals with the Korean welfare reform carried out due to the extremely unstable societal atmosphere, caused by the 1997 economic crisis. Introduction of the National Basic Livelihood Security Act and expansion of the coverage of social insurance are characterized as the projected reform. Nevertheless, the newly introduced public assistance program and the social insurance schemes still have room for improvement. For example, social insurance schemes had provided a protective umbrella in favor of regular workers, but it did not do the same for temporary contract-based workers or the self-employed. The government's efforts have not been sufficient to overcome these problems. This paper suggests some measures to resolve problems still existing in the Korean welfare system today.
This case study analyzed how Korea achieved rapid economic growth with i.t1ere-JSing equity and poverty aJlcviarion. Korean GDP per capita increased 110 times and absolute poverty rate dccn.:ased from 48.3 percent to 9.8 percent l:x:tween 196 l and 2001. Ir is true to say in rhe Korean case that the most efiecrive measure in reduction of the absolute pwerty level has been to make the economic pie biggcr. It is called growth-firsr~istrihution-larcr principle and brought abJut economic success hy overcoming a sc:vere shortage of natural endowments.
TI1e Korean government prioritized certain development-led industries in order to accelerate economic μ;ro\\•th. It was called '"imbalanced development strate,gy" and assessed as being more effective than "balanced development strategy" within the limited budget for ernnomic development. Although income inequality became aggravated Jue to the grmvrh-first polity and imbalanced strate,gy, the sizl' of the economic pie increased drastically. The income levels of middle and low income households increased to such an extent that much income inequality could l:x: rolernted. le can be said that in Korea. rapid economic growth raised welfare levels during rhe period between the l 960s and the 1990s even as income inequality worsened.
Korea ran into serious economic difficulties in late 1997. The poverty rates rose sharply from 7.67 rercem in 19'-)7 to 14.28 pen:ent in ·19'-)8. TI1e Korean govemrnenr w1dertook various anti-poverty programs designed to ease the impan of ma-.s lay-offS by implementing a new public assistance program and expanded the coverage of sx·ial insuranu.c:. In addition, hwnan resource development programs \Vere intrOOuced thar enhanced the access of the vulnerable class to the labor market by laying stress on labor welfare, raking mea,ures to protect irregtUar employees, and extending the application of the minimum wage system to all industries. Thanks to these efforts of the government, the p.>verty rates have decreased since 1999.
1bis study has led us to six tentative but useful lessons learned from the Korean success to lx applied to ocher developing countries: establishment of a clear objective of development and. the cornmirmenr of authorities; r,crn.ptive sdt·ction of rtprcscntative kx:omotive engines for rapid economic gro¥.-th and properly designed management; lx.'St investment in human rt'Source development; fair land reform and rural development; job creation and expansion of employment; and building-up of country's capacity to implement plans and projects expeditiously within budgeted costs.