Economist gets spotlight for wealth studies

Dongguk University economics professor Kim Nak-nyeon/ Korea Times photo by Kim Jae-won

By Kim Jae-won

Dongguk University economics professor Kim Nak-nyeon has drawn attention from the media for his two recent studies on inheritance of wealth and its centralization based on data from the tax agency.

He said that Korea’s wealth inequality has worsened since 2000 based on inheritance tax data. Those in the top 10 percent had 66 percent of the nation’s total assets between 2010 and 2013, according to his working paper published in October.

According to the economist, inheritance contributed to 42 percent of wealth accumulation in the 2000s in Korea, which was a sharp increase from the 1980s when it took up only 27 percent.

“Such an inequality gap will become even wider in the future because Korea faces a low economic growth age that provides little chance to the have-nots,” Kim said in an interview with The Korea Times.

He said that Korea is becoming an aging society, adding a bigger burden to the economy as less people are economically active.

“This is a serious problem. The younger generations will have less returns compared to their talent and efforts. Such a trend has started already.”

This is contributing evidence of the “silver spoon theory” which is popular among the younger generation describing their poor economic conditions. According to the theory, those born to rich families get richer, thanks to their parents’ wealth while those from ordinary people have no hope to rise up the social ladder.

Kim urged the government to invest more in public education which can contribute to increasing economic growth and wealth distribution.

“High economic growth is a good way to prevent the income divide. In the past, the fruits of growth could reach to the bottom income bracket in Korea because the country’s economy expanded hugely and rapidly.”

Kim is gaining an international reputation as Thomas Piketty, the renowned economist who authored the book, “Capital in the Twenty-First Century,” praised him for his studies. Kim’s thesis on the Korean economy titled “National Accounts of Korea 1911-2010” was also translated into Japanese by Hitotsubashi University.

Asked about his next goal, Kim said he will focus on economic studies with long-term and international perspectives.

“I will spare no effort in continuing my studies, which are in line with the work I have done on wealth and income.”