Income Distribution in East Asian Developing Countries: recent trends

Abstract

This paper updates estimates of the trends in income distribution in the eight countries of the developing East and Southeast Asian region. In the last update by Krongkaew (1994), inequality was found to be increasing in the newly industrialising economies of Hong Kong, Korea, Singapore and Taiwan, while in the ASEAN−4 (with the exception of Thailand) it was declining. Since then, the region has undergone the East Asian financial crisis of 1997–98. Recent data indicate that income distribution in Hong Kong and Taiwan continues to improve. Income inequality in South Korea declined until 1993 but began to increase slowly until the crisis sharply widened the disparity. The evidence for Singapore is mixed, with one set of estimates showing a dip in inequality while another indicates a widening of income disparity during the crisis. The crisis had the immediate impact of improving income distribution in all the ASEAN–4 countries, mainly because of reductions in the income shares of the top income groups. Later data show that inequality has since risen in all of them, except for Malaysia (for which no recent data are available).

Recent Trends in Inequality and Poverty in Developing Countries

“…The slightly increasing pattern showed in Figure 4.6 for the unweighted mean of the consumption Gini in EAP hides important differences across countries (ADB, 2012;Chusseau and Hellier, 2012;Ravallion and Chen, 2007;Sharma et al, 2011;Solt, 2009;Zin, 2005). Consumption inequality increased in most economies in the region during the 1990s, with the exception of Thailand and Malaysia.…”

Growing Income Inequalities

“…Emerging East Asian countries experienced a decrease in inequality during the seventies and eighties (Krongkaew, 1994) followed by growing inequalities in the nineties and 2000s (Zin, 2005;Ortiz and Cummins, 2011). However, Solt (2009) calculations provide a more ambiguous diagnosis.…”

The Global Crisis and Poverty

“…They show that the poverty rate increased from fifteen percent at the onset of the crisis to thirtythree percent at the end of 1998. Zin (2005) goes over the previous papers that examine the impact of the Asian Crisis on Asian countries. Zin (2005) points out to the fact that the Asian Crisis affected the uneducated, the inexperienced, the young female workers, and the urban sector the most.…”