South Korea Income Redistribution: 28th in 2023

South Korea ranked 28th among 29 comparable OECD countries for the redistributive effect on income in 2023. Its Gini coefficient improvement rate was 17.6%. This is the percentage by which taxes and cash benefits reduced income inequality.

The international comparison figures are based on 2023 income in OECD income distribution statistics reported on September 20, 2026.

What income redistribution and the Gini coefficient mean

Income redistribution is the process by which taxes, welfare benefits, and other measures change the distribution of income. This comparison uses Gini coefficients for market income and disposable income. The Gini coefficient measures the degree of income inequality.

The OECD compares income distributions using household income adjusted for household size. That is because living conditions differ by household size even at the same income level. These statistics are not calculated from individual pay slips alone. The income categories are set out in the OECD income distribution statistics guidelines.

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South Korea’s Gini coefficient improvement rate was 17.6% in 2023, ranking 28th among 29 comparable OECD countries.

Comparing the redistributive effect in South Korea and other countries

South Korea’s improvement rate was below the 2023 average of 34.4% for the countries compared. Costa Rica was the only country with a lower rate. The table ranks countries from highest to lowest improvement rate.

South Korea’s market income Gini coefficient was the lowest in this group. Its disposable income Gini coefficient was the 22nd lowest. Inequality fell in South Korea too, but the reduction was greater in other countries. Country figures are available in Yonhap News Agency’s OECD statistics comparison table.

The drop in rank should therefore not be read as an absolute worsening of inequality. South Korea’s Gini coefficient itself fell from 0.392 to 0.323. Country rankings before and after redistribution and changes in the indicator convey different information.

Example calculation of the 17.6% improvement rate

South Korea’s 2023 improvement rate is calculated by dividing the decrease in the Gini coefficient by its starting value. The market income Gini coefficient was 0.392. The disposable income Gini coefficient was 0.323.

1. Calculate the decrease. 0.392 - 0.323 = 0.069.
2. Divide the decrease by the starting value. 0.069 ÷ 0.392.
3. Convert it to a percentage. 0.069 ÷ 0.392 × 100 ≈ 17.6%.

The Gini coefficient decrease of 0.069 and the improvement rate of 17.6% should not be confused. The improvement rate shows how much the coefficient fell relative to its starting point. It does not mean an individual’s income rose by that amount.

A pay-gap example can also help explain the direction of redistribution. The amounts below are hypothetical, not actual tax calculations. This is an illustrative example separate from Yonhap News Agency’s country-level Gini coefficient calculations.

In this example, the income gap between the two people fell by 1 million won a month. The actual Gini coefficient is calculated from the income distribution of the entire population. The difference between two people’s incomes cannot be used to calculate South Korea’s improvement rate.

Why the rank is low despite improvement over the past

A rise in the improvement rate and a rise in the international ranking are separate matters. South Korea’s improvement rate rose from 11.6% in 2015 to 19.0% in 2020. It was 17.6% in 2023. It has not risen continuously.

If other countries have higher improvement rates, South Korea can remain near the bottom even when its own figure improves. The countries included in the comparison may also change from year to year. Simply lining up rankings from different years can give a misleading impression of the size of the change.

The OECD revised South Korea’s historical data in its June 2026 update. The revisions cover 2011 through 2022. Long-term trends are more accurately compared using the same version of the data. The revision history appears in the OECD income distribution statistics update information.

Redistribution among older adults and the pension system

The redistributive effect for older adults in South Korea is greater than for all ages combined, but low in international comparisons. Here, older adults means people aged at least 66. This should not be confused with other commonly used age thresholds for older people.

As income from work falls in retirement, public pensions play a larger role. South Korea’s improvement rate for older adults was below the 2023 average of 57.1% for the countries compared. In the same year, the disposable income Gini coefficient for older adults in South Korea was 0.380. That indicates greater inequality than the figure of 0.323 for all ages. The comparison results are available in coverage of the 2023 OECD statistics by age.

Years of pension contributions offer a clue to this difference. The OECD says South Korea’s pension system is still maturing. The current older generation includes people who contributed to pensions for only a short time. The lengthening contribution periods of newly retiring generations should also be considered. The OECD’s 2025 report on pensions in South Korea explains this background.

Even if market income is distributed equally among older adults, that does not mean they have enough to live on in retirement. Income earned by continuing to work after retirement can affect the indicator. How much income people retain after they stop working must be assessed separately.

Welfare and assets not captured by the cash income indicator

This indicator alone cannot assess the performance of the entire welfare system. It focuses on the distribution of household cash income. Medical and education services and asset holdings must be considered separately.

The OECD’s definition of disposable income treats in-kind services and consumption taxes separately. There is therefore a basis for interpreting the cash redistribution effect as weak. Extending that ranking to welfare as a whole goes beyond what the indicator measures. The household income definition in OECD Society at a Glance 2024 explains this distinction.

Common misunderstandings about the income redistribution ranking

The figure of 28th must be read alongside the comparison group and what is being measured. This result compares 29 countries with data for 2023. It is not a ranking of all OECD member countries for the same year.

• 28th is the rank for the redistribution improvement rate. It is not the rank for disposable income inequality.
• 17.6% is the percentage decrease in the Gini coefficient. It is not a tax rate or refund rate.
• A low market income Gini coefficient does not necessarily mean a high standard of living. The absolute level of income is separate information.
• The Gini coefficient and the poverty rate are different indicators. The poverty rate is the percentage of the population below a specified income threshold.
• This comparison alone cannot separate the contributions of taxes and welfare benefits. Deciding which policies to change requires further analysis.

To check cross-country rankings again, the income years must match. All ages and older adults must also be distinguished. Market income and disposable income Gini coefficients can be checked together in the OECD Data Explorer.