Demographic Change and Inequality in the Korean Farm Income

Abstract

This study examines the impact of demographic shifts on income inequality among farm households over an 18-year period, from 2003 to 2021. Our principal aim is to determine whether changes in income inequality are driven more by intra-group changes in age/household size groups or by changes between these groups. Furthermore, the study aims to understand which age/household size groups are associated with changes in income inequality. The methodology of this study involves using the generalized entropy (GE) index, which allows for the decomposition of inequality within and between population subgroups. The study divides the total population into subgroups based on age and household size and analyzes both static and dynamic inequality. Results show that (i) the within-group effect for static farm income inequality is more significant than the between-group effect. (ii) On the other hand, for changes in inequality (dynamic inequality), the between-group effect in the case of age and the within-group effect in the case of household size are important. (iii) Changes in income inequality are more related to structural changes in the age group of farmers than to the size of household.