Bank of Korea (BOK) headquarters in Seoul / Courtesy of BOK
Expanding social infrastructure and dramatically increasing education investment in regional areas beyond Seoul are critical to boosting social mobility and helping break the cycle of inherited poverty, a central bank report said Wednesday.
The latest Bank of Korea (BOK) paper highlighted the need for structural reform to mitigate deepening regional disparities that undermine national cohesion and exacerbate low birthrates.
The findings renew the warning thatKorea’s Seoul-centered development model is no longer sustainable, with accelerated social and economic divides cementing demographic decline.
The central bank found that children born in non-Seoul regions saw their incomes and assets grow if they moved to the Seoul metropolitan area.
Children born in the Seoul area also tend to move up in social class when they move within the Seoul metropolitan region, especially if they come from low-income families.
However, those who moved only between cities or provinces outside the capital region saw far weaker prospects in income and asset growth.
“Housing in Seoul is expensive, so many low-income young people choose to move to nearby regional cities instead of the capital. This limits their chances to improve their economic status in the form of income and asset growth,” the report said. “As a result, the inheritance of poverty has intensified among those who remained in non-metropolitan regions after being born there.”
The central bank also found that Seoul-centric migration is making regional inequality worse. Children born outside Seoul have strong reasons to move to the capital, while those born in Seoul have strong reasons to stay there.
This one-way flow of young people to the capital city is causing problems across the country, notably through increased inequality, weakening social unity and low birthrates.
Source: Korea Times News
