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Income gap deepens among S. Korean seniors

All Headlines 11:18 January 30, 2013

SEOUL, Jan. 30 (Yonhap) -- Income inequality among senior citizens in South Korea reached a 10-year high in 2011, apparently due to the country's insufficient social welfare system, data showed Wednesday.

The Gini coefficient, a common measure of income inequality, is estimated to have reached 0.419 based on the current income of South Koreans aged 65 and older in 2011, the highest level since 0.399 tallied in 2003, according to the data by the Korea Labor Institute.

A reading of zero means complete income equality, while higher numbers nearing one indicate a widening gap in earnings between the rich and poor.

"A figure hovering above 0.4 indicates a severe income disparity among the country's retirees," said Ban Jung-ho, a researcher at the institute said.

Ban said the widening income gap among seniors is mainly attributable to the country's poor social welfare system, which failed to redistribute wealth among South Koreans.

The number of retired South Koreans also spiked over the cited period, with the ratio of senior households reaching 29.2 percent in 2011, up 9.1 percentage points from 2003, which further weighed down on the country's wealth divide.

Meanwhile, separate data compiled by the Organization for Economic Cooperation and Development also reflected the deepening income inequality in the country, showing that the Gini coefficient for those aged 65 and older reached 0.405 in the late 2000s, the third highest in the Paris-based club of industrialized economies.

Mexico topped the group with the highest coefficient figure of 0.524, followed by Chile with 0.474, the data showed. The OECD data reflect after tax and transfer income.

The Czech Republic had the lowest income gap among its elderly citizens at 0.188. For the U.S. and Japan, the Gini coefficients were 0.386 and 0.348, respectively, the data added. The OECD average stood at 0.299.

colin@yna.co.kr
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