Neo-liberal reform and bipolarisation of income in Korea

Abstract

This paper explains the neo-liberal reform measures - foreign direct investment (FDI) policies, financialisation and labour market reform - of the Korean economy following the 1998 economic crisis. It investigates how they have influenced a process identified as the bipolarisation of Korea. Although the increase in FDI inflows has contributed to the economy by overcoming balance of payments difficulties, it has led to increased income inequality. As a result of labour market reforms that targeted labour market flexibility, the number of non-regular/nonstandard and part-time workers has increased significantly over the past decade. Labour market reform and financialisation aggravated the bipolarisation. © 2011 Journal of Contemporary Asia.