By Yoon Ja-young
It is harder to become self-made in Korea, with inheritance from parents taking a greater role in one's wealth, a new study showed Tuesday.
Young people from lower- and middle-class families are increasingly depreciating themselves on the Internet as born with an "earthen spoon" in their mouths, compared to those born with a silver spoon.
They say they could never keep up with those lucky people.
Prof. Kim Nak-nyeon of Dongguk University, who authored the study, said such sarcasm actually has a basis in reality. "One accumulates wealth by saving part of one's income, or inheriting wealth from parents," he explained.
"In a society with a high economic growth rate, the door is open for anyone to accumulate wealth through individual effort without relying on inheritance. When the economic growth rate falls, however, such opportunities disappear and inherited wealth matters more," he noted.
In his research, he showed that inheritance contributed to 42 percent of wealth accumulation in the 2000s. In the 1980s, it took up only 27 percent of total wealth, slightly rising to 29 percent in the 1990s.
In other words, if one had 100 million won in assets, only 27 million won came from his or her parents while the remaining 73 million won was accumulated through savings or investment. Now, nearly half of all wealth comes from the parents.
Prof. Kim attributed it to the slowdown of economic growth. During the era of high economic growth, savings rates in the private sector rose steeply. The young working generation had more opportunities to accumulate wealth than their retired elders.
Korea's economy recorded on average 8.8 percent annual growth in the 1980s and 7.1 percent growth in the 1990s, and many could increase their assets even if they weren't born into rich families. The savings rate was also above 30 percent, reducing inheritance's role in wealth accumulation.
With economic growth slowing down, however, there is less chance of writing such success stories.
The professor said that the ratio of inheritance to total wealth is still low in Korea compared with other developed economies, such as the United Kingdom, Germany and Sweden. Inheritance accounts for 56.5 percent of wealth in the United Kingdom, 47 percent in Sweden and 42.5 percent in Germany.
However, he showed concern over the steep rise in the inheritance ratio in Korea.
"If inheritance becomes a much more crucial means of accumulating wealth than savings, and if there is serious inequality in such wealth accumulation, we would not say such a society is a meritocracy," Prof. Kim said.
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Young people from lower- and middle-class families are increasingly depreciating themselves on the Internet as born with an "earthen spoon" in their mouths, compared to those born with a silver spoon.
They say they could never keep up with those lucky people.
Prof. Kim Nak-nyeon of Dongguk University, who authored the study, said such sarcasm actually has a basis in reality. "One accumulates wealth by saving part of one's income, or inheriting wealth from parents," he explained.
"In a society with a high economic growth rate, the door is open for anyone to accumulate wealth through individual effort without relying on inheritance. When the economic growth rate falls, however, such opportunities disappear and inherited wealth matters more," he noted.
In his research, he showed that inheritance contributed to 42 percent of wealth accumulation in the 2000s. In the 1980s, it took up only 27 percent of total wealth, slightly rising to 29 percent in the 1990s.
In other words, if one had 100 million won in assets, only 27 million won came from his or her parents while the remaining 73 million won was accumulated through savings or investment. Now, nearly half of all wealth comes from the parents.
Prof. Kim attributed it to the slowdown of economic growth. During the era of high economic growth, savings rates in the private sector rose steeply. The young working generation had more opportunities to accumulate wealth than their retired elders.
Korea's economy recorded on average 8.8 percent annual growth in the 1980s and 7.1 percent growth in the 1990s, and many could increase their assets even if they weren't born into rich families. The savings rate was also above 30 percent, reducing inheritance's role in wealth accumulation.
With economic growth slowing down, however, there is less chance of writing such success stories.
The professor said that the ratio of inheritance to total wealth is still low in Korea compared with other developed economies, such as the United Kingdom, Germany and Sweden. Inheritance accounts for 56.5 percent of wealth in the United Kingdom, 47 percent in Sweden and 42.5 percent in Germany.
However, he showed concern over the steep rise in the inheritance ratio in Korea.
"If inheritance becomes a much more crucial means of accumulating wealth than savings, and if there is serious inequality in such wealth accumulation, we would not say such a society is a meritocracy," Prof. Kim said.
