IMF and the crisis of the marginalized urban sector in Korea

Abstract

The “Asian economic crisis” brought with it horrendous social consequences in Korea such as mass unemployment, unparalleled rises in poverty, diminished social services, rising school dropouts, increasing suicide rates, divorce and domestic violence. The primary aim of this study is to identify policies that would ameliorate these effects on the urban poor in Korea. In order to do so, we clarify how the nature and magnitude of urban low-income households in Korea have changed since the economic crisis. After providing an overview of macroeconomic events associated with the crisis and the main links between these events and economic conditions of the urban poor, we identify the socioeconomic characteristics and changes of household income for the urban poor during the crisis periods, 1997–1999. We investigate how the IMF program has changed the lives of the low-income households by adopting regression analyses and the decomposition method. The study concludes with key policy issues that would help prevent or offset the deterioration of the urban poor in Korea.