A Study on Factor Decomposition of Consumption Inequality in South Korea

Purpose: This study examines the determinants of household consumption expenditure and quantifies their contribution to within group inequality by gender of household head in South Korea. Research design, data, and methodology: This study first decomposes total inequality into within and between inequality by gender of household head. It also examines the association between a vector of household demographic and socioeconomic characteristics and household consumption expenditure in an attempt to identify how much inequality can be attributed to each of explanatory factors. This study empirically draws upon the recent national representative dataset, Survey of Household Finance and Living Conditions (SFLC) 2 021 c ollected b y Korea Statistical Office. Results: According to the present study, inequality in 2021 in South Korea was found to be mainly dominated by inequality within population sub groups. Examining the determinants of household consumption inequality, it shows that factors and their conributions are different between male and female headed households. For instance, whilst the type of job occupation of a head appears to have a large impact on inequality within male headed households, it is found to have marginal contribution compared to within female headed households (25.2% vs. 7.4%). In case of household demography, it is observed as the second largest factor increasing within inequality among female headed households (31.2%) whereas its contribution to inequality within inequality among male group was relatively small (18.6%). Implications: Our study suggests that target specific investigation and deep structural understanding need to be made on the different characteristics of within inequality as reflected by the different role of factors and their contributions. Amongst, the different inequality impact of higher education might reflect that the expansion of higher education had a relatively lower impact on the living stand of female group than that of its counterpart, male group. Finally, the discriminatory barriers (e.g. job occupation) against female may reduce within inequality, it could widen total inequality, worsening distribution between male and female groups.