The performance of the Korean economy has been remarkable. It operates in a world with a rapidly aging labor force, technological change, and growing linkages across borders.

This Report attempts to improve our understanding of (a) income inequality in Korea, (b) the impact of income inequality on economic growth, and (c) the effects of economic growth and globalization through trade and foreign direct capital flows on income distribution. Through in-depth understanding and knowledge, the Report helps design a range of more effective policy for the Korean economy.

CHAPTER 1 Introduction

CHAPTER 2 The Korean Economy in Globalization
　2.1 Main Macroeconomic Indicators
　2.2 Changes in Population Composition and Urbanization
　2.3 Educational Composition of Population and Labor Employed
　2.4 Skills in Production and Export Structure, R&D Intensity, and Openness of the Economy
　2.5 Conclusions

CHAPTER 3 Income Distribution in Korea: Inequality Measurement
　3.1 Survey of Selected Gini Coefficient Studies in Korea
　3.1.a The First Group of Studies of All Households
　3.1.b The Second Group of Studies of Salary-and-Wage-Earner Households in Cities
　3.2 Measures of Inequality
　　3.2.a The Gini Coefficient
　　3.2.b The Theil Measure
　　3.2.c The Coefficient of Variation
　　3.2.d The Decile Dispersion Ratio
　　3.3 Sources of Data
　3.4 Inequality Estimates for Gross Incomeand Income Sources
　3.5 The Contribution of Source Incomes to Gini Coefficient
　3.6 Income Polarization
　3.7 Summary and Remark

CHAPTER 4 Analysis of Economic Growth in Open Economy Prospective
　4.1 Econometric Specification
　4.2 Data Sources and Descriptions
　4.3 Empirical Results
　4.4 Summary and Conclusion

CHAPTER 5 Explaining the Distribution of Income: Role of Skill-based Technology and Globalization
　5.1 Introduction
　5.2 A Simplified Framework
　5.3 Data Sources and Descriptions
　5.4 Empirical Results
　　5.4.a Regressions with E
　　5.4.b Regressions with EYR
　　5.4.c Decompositions of Changes in the Gini Coefficient
　5.5 A Survey of Empirical Studies on Gini Coefficient of the Distribution of Income in Korea
　5.6 Summary and Conclusions

CHAPTER 6 Concluding Remarks