1

APPENDIX TO

Top Incomes in Korea 1933-2010 Evidence from Income Tax Statistics

Nak Nyeon Kim

nnkimdonggukedu

Corresponding author Department of Economics Dongguk University

26 3 Pil-dong Chung-gu

Seoul Korea

and

Jongil Kim

jongildonggukedu

Department of Economics Dongguk University

26 3 Pil-dong Chung-gu

Seoul Korea

A Top Income Shares

A1 Income Taxation Data

The global income tax system was first introduced in 1934 by the colonial government The Income

Tax Law classified the sources of income into three classes corporate income (Class I income)

interest from corporate bonds and bank deposits (Class II income) and earned income from other

sources (Class III income) Class III income consisted of salaries wages bonuses farm income

(classified further into income of farm owners and tenants) business income rental income from real

estate dividends interest from financial assets other than those classified as the Class II income

Capital gains were not taxed Class III income was taxed for the households earning annually more

than 800 won The data on the number of taxpayers the amount of income tax paid and tax rate by

income brackets can be obtained from Chōsen Zeimu Tōkeisho [Statistical Tables of Public Revenue

of Colonial Korea] and Chōsen Sōtokufu Tōkei Nenpō [Statistical Yearbook of the Government of

Colonial Korea]

After liberation the global income tax system was abolished Instead taxes were withheld at source

separately on labor income business income rental income from real estate interest and dividends

Thus the data on total income earned by taxpayers are not available for this period of the separate tax

system although statistics on the amount of tax paid for each source of income are reported in Kuksae

Tonggae Yonbo[Statistical Yearbook of National Tax] published by National Tax Service of Korea

The global income tax system was reintroduced in 1975 Since then the global income which

includes interest dividend rents wages salaries bonuses and pension excluding capital gains was

taxed It should be noted that all taxpayers are not required to file global income tax returns

2

Taxpayers with wage income which includes wages salaries and bonuses do not have to file global

income tax returns if the amount of income from sources other than wage income does not exceed a

certain level For this type of taxpayers the wage income tax is withheld at source Those whose

financial income (interest and dividends) exceeds 40 million won should file global income tax

returns1 Taxes on financial income less than 40 million won are withheld at source Therefore the

statistics on global income tax do not cover all the top income earners because wage income tax is

withheld at source Therefore we have to combine statistics of global income tax and those of wage

income tax in order to account for all top income earners

Global income tax statistics can be obtained from Kuksae Tonggae Yeonbo [Statistical Yearbook of

National Tax] since 1976 Unfortunately it does not provide separate statistics on tax withheld at

source such as wage income for the period of 1976-1994 The data on wage income tax for 1979-85

can be obtained from the internal source of National Tax Service The available information on

income tax has become rich in recent years but was poor in the earlier years

Adjustments are needed to ensure the consistency of long-term series in Korea which experienced

the different regimes before and after liberation However some adjustments could not be made due to

data limitations First due to the fact that Korea was divided after liberation the pre-liberation data

include both South and North Korea however those after liberation cover only South Korea Second

before liberation the current yearrsquos tax was levied on the income earned in the previous year The

system changed after the liberation so that it was levied on the income earned in the corresponding

year Thus we shift the pre-liberation data forward by one year so that data for the period of 1934-43

correspond to those for 1933-42 Third during the colonial period the total household income was

taxed and the amount of tax was allocated to individual household members in proportion to each

memberrsquos income It was different from the system after liberation in which taxes were levied against

individuals rather than households We adjust the income tax statistics during the colonial period so

that they may correspond to the individual-based income tax statistics Fourth as aforementioned

global income tax statistics exclude the financial income of those who are not required to file global

tax returns The criterion for the filing requirement changed over time We cannot make adjustment for

this due to data limitations

1 It was legislated as the financial global income tax in 1996 However the enforcement was suspended during the

period of 1998-2000 due to the economic crisis Prior to 2003 the financial global income tax was levied if the total

financial income of a couple exceeds 40 million won Since 2003 the number of individuals who are required to

pay the financial global income tax decreased since the criterion changed to include the total financial income of an

individual rather than that of a couple We cannot make adjustments for the inconsistency of coverage due to data

limitations

3

A2 Control Totals for Population and Income

To compute the top income shares we need to define the denominators (or control totals) for

population and income It is desirable to define the population denominator as the total number of

income earners yet it is not possible to compute it due to data limitations Thus we define the

population denominator as the total number of adults defined as 20 years old and above Because

studies on other countries adopt the same definition it is good for an international comparison We

obtain the total number of adults from the population statistics published by the Korea Statistical

Office For the period before liberation we interpolate the data by using the rate of change between

the population census in 1930 1935 1940 and 1944 The number of adults is presented in Table A1

The control total for income is obtained from National Accounts The table of income account by

institutional sectors in National Accounts provides the data on the amount of income accruing to

households and nonprofit institutions serving households by source such as compensation of

employees operating surplus and property income From this we need to subtract the items which do

not belong to the earnings of individual households usually defined as earned cash income They are

employerrsquos social contribution in compensation of employees imputed rents to owner-occupier in

operating surplus and financial intermediation services indirectly measured (FISIM) in the financial

income We compute the control total for income by subtracting these items from the household

income in National Accounts2

For the colonial period we use the National Accounts constructed by Kim ed (2012) Because the

income account by institutional sectors was not constructed in this study we compute the household

income by subtracting the imputed rents from the sum of compensation of employees and operating

surplus Although we have to exclude the retained corporate income from the operating surplus we

cannot make adjustment for this because we do not have the relevant information However it will not

make much difference for our estimation of the income denominator during this period because the

retained corporate income would be a relatively small amount The data on the income denominator is

presented in Table A13 The ratio of global income taxpayers to the total adult population increased

over time but remained low It was less than 5 before liberation and less than 10 after liberation It

implies that a large proportion of taxpayers only paid the wage income tax which was withheld at

2 The household income in National Accounts also includes the income of nonprofit institutions serving households

which should be excluded for our purpose However due to the limitations of data we cannot make adjustment for

this However the amount is relatively too small to make much difference

3 The income denominator cannot be computed for the period of 1943-74 The income denominator for the period of

1941-42 cannot be computed since Kim edrsquos (2012) study ends in 1940 although the income tax statistics are

available until 1942 The national accounts in Korea provide the income by institutional sectors after 1975

4

source Table A1 also presents the total income and average income per adult at constant 2010 prices

along with consumer price index to be used for the conversion The data on consumer price index

since 1965 are taken from the web-based database (KOSIS) of the Korea Statistical Office Those

before 1940 are obtained from the deflator for private consumption estimated by Kim ed (2012 507)

We interpolate the data for the period between 1940 and 1965 by using the index for the Seoul area

estimated by Park and Kim (2011)

A3 Computing Top Income Shares

A31 Pareto interpolation

We estimate the top income shares by using the number of taxpayers and the amount of income by

income brackets obtained from the income tax statistics To estimate the income shares of the top

fractiles such as the top 10 1 01 and 001 we use the same Pareto interpolation method as

Piketty and Saez (2001 39) Pareto distribution has a cumulative distribution function specified as

F(y)=1-(ky)a where k and a are constants and a is called a Pareto coefficient The distribution has a

property such that the average income of taxpayers with an income level above a threshold income y

is proportional to y by factor of b and b=a(a-1)

By using this property we can estimate the top income shares as follows First we compute the

cumulative proportion of taxpayers and income by dividing the number of cumulative taxpayers and

the amount of cumulative income in each income bracket in the income tax statistics by the control

total of population and income defined in A1 respectively Second we select the income bracket

which has the cumulative proportion of taxpayers p closest to the top fractiles such as the top 1 If

the lower income threshold for this bracket is s using the above property of the Pareto distribution we

can estimate the Pareto coefficient a(= b(b-1)) and k(=sp1a

) Once we estimate a and k we can

compute the income share of the corresponding income group based on the relationship that 1-

F(y)=(ky)a For example if we compute the top 1 income shares we place 1-F(y) equal to 001 and

solve the equation in order to get the threshold income y Then the average income of the top

percentile is the product of y and b The income share of intermediate fractiles such as the top 1-01

can be computed by the difference between income shares of the top 1 and the top 01

A32 Adjustment of Income Tax Statistics for the Colonial Period

Income tax to be paid during the colonial period was counted by applying a corresponding tax rate

to the householdrsquos net taxable income which equals the sum of income earned by all household

members net of deductions Then the amount of tax to be paid by the household was allotted to each

5

household member by the share of each member in the total household income Due to this feature of

the tax system at that time the income tax statistics of this period provide two kinds of tabulations

One tabulation (Case A data) provides the number of taxpayers defined as household and the amount

of net taxable income by brackets of the net taxable income The other tabulation (Case B data)

provides the number of taxpayers defined as individual by tax-paid brackets without any information

on income

To adjust the data for our purpose first we compute the amount of income by adding deductions to

the net taxable income The deductions during this period consisted of deductions for wage income

dependent family and insurance the deduction rate was scheduled to rise with an income decrease

We also make adjustment for the deduction for dividends the tax on which was levied after deducting

40 of dividends The deduction rate of dividends is thought to increase as the amount of dividends

increases unlike the deduction for wage income Because the data do not provide the deductions by

income brackets we apply the ratio of total deductions to the total net taxable income in order to

obtain the total income regardless of income bracket4

Second we should make an adjustment so that the tabulation in terms of household unit may be

converted to the one in terms of an individual unit Moriguchi and Saez (2008) made an adjustment in

the Case A data for the pre-war period of Japan by substituting household income for household

headrsquos income They considered that this adjustment does not make much difference because the

income of household heads accounts for more than 95 of the household income However it may

lead to an upward or downward bias in the estimation depending on the income groups Therefore we

compare the estimates from Case A data and Case B data By using Case B data with tax-paid brackets

we can compute the net taxable income corresponding to tax-paid in Case B data because we have the

corresponding tax rates for all the brackets of the net taxable income It allows us to compute the

number of taxpayers by brackets of net taxable income in terms of individual household members

from Case B data However the Case B data do not provide the amount of net taxable income by

brackets Therefore we assume that the average net taxable income for each bracket equals L+(H-

L)d where L and H are the lower and upper thresholds of the bracket5 Although d may be different

among brackets it is assumed that d is constant in order to compute d based on the total amount of net

taxable income from Case A data6 Once we compute d we obtain the amount of income by income

4 The ratios for wage income and deductions are 69-99 and 09-22 respectively

5 The coefficient d locates the average in between L and H For instance if d equals 04 the average is greater than L

by 40 of difference between H and L For the brackets of top incomes the number of taxpayers tends to fall as the

income increases Thus the average income of the bracket will be less than the midpoint which implies that d is

between 0 and 05

6 When there is only one taxpayer in a bracket usually observed in the highest income bracket we can use the amount

of income directly from Case A data Although the assumption of constant d is restrictive it will not make a

6

brackets

Comparing the estimates of top income shares based on the two methods mentioned above we find

that the estimate of the top 001 income shares based on Case A data is slightly greater than that

based on the Case B data whereas it is the other way round for top 1 income shares However there

is not much difference between the top 01 and 05 income shares It is due to two biasing factors

which work in opposite direction when we estimate the top income shares based on Case A data by

substituting household income for household headrsquos income The first factor causes an upward bias

since we overestimate household head income by including the incomes of other household members

in household head income The second factor gives rise to a downward bias as we enlarge the top

income group to lower income levels due to the omission of high-income members other than

household heads in Case B data In the estimation of the top 001 income shares the first factor

dominates the second factor and vice versa in the estimation of the top 1 income shares7

In this paper we use Case B data based on the individual unit in order to make the top income

shares series in the colonial period consistent with those after liberation

A33 Combining Global Income Tax Statistics and Wage Income Tax Statistics

Due to the extensive withholding system a small portion of taxpayers are required to file the global

income tax returns as Table A1 shows In particular taxpayers with wage income do not have to file

global income tax returns if the amount of income from other sources does not exceed a certain level

and the wage income tax is withheld at source in this case Therefore we complement global income

tax statistics with wage income tax statistics in order to make up for a large number of wage income

earners missing in the global income tax statistics Because many taxpayers who file global income

tax returns are also counted in wage income tax statistics we have to remove those overlapping

taxpayers when we combine the two income tax statistics

Global income tax statistics provide the tabulation of number of taxpayers and the amount of

income by income sources and by brackets of total income The wage income in this tabulation is the

double-counted amount of income when we combine the statistics To subtract this part of the income

we have to make the income brackets of the two income tax statistics correspond each other Faced

with a similar problem Moriguchi and Saez (2008 Appendix A31) introduced an assumption that

significant error because the total amount of net taxable income is obtained from actual data

7 Moriguchi and Saez (2008) used the data similar to Case A data when they estimated the top income shares in Japan

for the pre-war period In this case the estimate of the top 1 income shares using the data based on the household

unit has a significant downward bias compared with the estimate based on an individual unit The bias becomes

larger in the estimation of the top 5 income shares

7

those with higher total income tend to have higher wage income That is they assumed that the ratios

of wage income to total income are constant for each bracket8 Then they computed the ratios by

brackets of total income and converted the brackets of total income to those of wage income by

multiplying the thresholds of total income by the ratios This method just shifts the thresholds with the

number of taxpayers and the amount of income unchanged

Then we remove the double-counted part by subtracting the number of taxpayers and the amount of

wage income from the global income tax We add up the global income tax statistics and the wage

income tax statistics net of the double-counted part To remove the overlapping part and to add up the

two income statistics we also have to make different income brackets of the two statistics correspond

to each other For this we have to split the brackets of one tax statistics further with new thresholds

set by using the other tax statistics For this we use the Pareto interpolation method9

A34 Additional Adjustments Made by Periods

To overcome the limitations of data we made additional assumptions if allowed The data for the

period of 2005-2010 are sufficient enough to estimate the top income shares without any adjustment

However the data for 1995-2004 are not complete as those for 2005-2010 The tabulations of global

income tax for 1995-2004 provide the amount of income by brackets of net taxable income rather than

total income They should be converted into the amount of total income by income brackets We

8 This assumption of Moriguchi and Saez (2008) may not reflect reality if the distribution of income by sources varies

much among individual taxpayers Thus we try to estimate the top income shares by making different assumptions

on the distribution However the estimates are not so much different from 119 the estimate based on the method

of Saez and Moriguchi (2008) Thus we adopt the method of Saez and Moriguchi (2008) which allows us to

compare our estimate of top income shares in Korea with that in Japan

9 This method is different from the Pareto interpolation explained in A31 which does not use the data on the upper

thresholds The Pareto interpolation in A31 uses only the lower thresholds and the number of taxpayers and their

income above the lower thresholds This method which considers the income bracket as an open upper interval is

suitable when we estimate the top fractiles income shares however it is not proper when we create additional

brackets within an income bracket by a new threshold Therefore we use an interpolation method which uses both

the upper and lower thresholds of an income bracket First to interpolate the number of taxpayers we use the

equation H(yi+1)H(yi)=(yiyi+1)α induced from the Pareto cumulative distribution function where yi and yi+1 are the

lower and upper thresholds of the corresponding income bracket respectively and H is the share of taxpayers with

income higher than the threshold income y From the equation we can obtain α the Pareto coefficient of the

income bracket which is different from a in the equation of A31 If we substitute yc a new threshold income for yi

in the above equation we obtain the number of taxpayer in a corresponding new income bracket Similarly we can

interpolate the amount of income by using the equation G(yi+1)G(yi)=(yiyi+1)α-1

where G is the share of income

above the threshold income y

8

compute the amount of deductions and exemptions (the difference between income and net taxable

income) by using the data on the tax rate and the tax paid by brackets of net taxable income in income

tax statistics and obtain the data by income brackets The tabulations of wage income tax also provide

the amount of net taxable income by brackets We also need to convert the net taxable income into

total income by adding exemptions and deductions to the net taxable income However the data

source just provides the total amount of wage income without income brackets Thus we compute the

ratios of wage income to net taxable wage income by income brackets from the data of year 2005 and

apply the ratios to other years in order to convert the net taxable income into total wage income

Information needed to compute the double-counted amount of income when we combine the global

income tax and wage income tax in A33 is not available before 2005 Thus from the data for the year

2006 we compute the ratios of the double-counted taxpayers to total taxpayers and their wage income

to total wage income respectively We use the ratios for the period of 1995-2005 in order to remove

the double-counted parts by income brackets

The data for 1979-85 are similar to those for 1995-2004 as mentioned above We do not have to

make adjustments for wage income since we can obtain the amount of wage income by income

brackets for this period However we do not make an adjustment for the overlapping parts for this

period when we combine the global income statistics and wage income statistics First of all the

relevant information is not available for this period Second this period is far too old to use the ratios

computed from the data of year 2006 Third during this period only 3 of taxpayers filed global

income tax returns Thus there were less overlapping taxpayers during this period compared with the

more recent years During this period those who earned a large amount of financial income were

exempt from filing global income tax returns as long as the financial income was their only income

source Overlapping taxpayers not adjusted in this period tend to yield an upward bias in estimating

the top income shares whereas the absence of financial global income tax leads to a downward bias

No additional adjustment is needed for the period of 1933-40 except for the adjustments made in

A32 We also estimate the top income shares based only on the global income tax statistics which

are available since 1976 Although the top income shares estimated this way has a shortcoming for its

narrow coverage of taxpayers compared with those estimated after combining two kinds of income tax

statistics they allow us to estimate the continuous series in the top income shares over 1976-2010

without missing periods

The estimates of the threshold income and the average income for the top percentiles are presented

in Tables A2 and A3 They are converted into real terms at constant 2010 prices by using consumer

price index The estimates of top income shares are presented in Table A4

A4 Top Income Composition

9

The income tax statistics before liberation provide the amount of income by sources without

dividing the taxpayers into separate income brackets Therefore the reported figures under the title of

the top 1 income composition in Table A5 for 1933-42 are not exactly those for top 1 The size of

top income groups varies from the top 14 in 1933 to the top 48 in 1942 We cannot compute the

top income composition between 1942 and 2006 since the income tax statistics do not provide

relevant information for computing the top income composition We obtain income composition for

the top 10 1 01 and 005 for the period of 2007-10 by combining the statistics of global

income tax and wage income tax

The top income composition is presented in Table A5 by income sources such as wage

income(wages salaries bonuses and pension) business income(unincorporated business profits farm

income and self-employment income) rents (rents from farmland and real estate) interest and

dividends After liberation rents from farmland disappeared due to the land reform the rents from real

estate were then included as business income

B Top Wage Income Shares

B1 Wage Income Taxation Data

We cannot estimate the top wage income shares before liberation because the income tax statistics

during this period do not provide data by sources of income After liberation income taxes were

separately withheld at source The Kuksae Tonggae Yonbo [Statistical Yearbook of National Tax]

(Semu Tonggae Yonbo [Statistical Yearbook of Tax Affairs] before 1965) provides the data on the

number of taxpayers the amount of income tax paid and tax rates by income brackets back to the

year 1957 As aforementioned the data source does not provide statistics on separate tax withheld at

source such as wage income tax for the years 1976-1994 Although the data on wage income tax for

1973-85 can be obtained from an internal source they are missing for the years 1986-94

B2 Total Wage Denominator

We need to define control totals for total wage earners and total wage income in order to estimate

the top wage income shares The number of total wage earners changes depending on the sources of

data due to the different coverage of workers The total number of employment in the Kyungje

Hwaldong Ingu Yonbo [Annual Survey on Economically Active Population(ASEAP)] published by

Korea Statistical Office is found to be considerably lower than the number of employment from

income tax statistics in recent years which provide the comprehensive information on wage income

earners including taxpayers workers with wage level below the exemption point and daily workers

10

The reason is that among the workers counted in income tax statistics there are some who are not

classified as employed in the ASEAP It is due to the difference in detecting the status of employment

between the two data sources10

Here we define the control total for wage income earners as the total

number of employment in the ASEAP which includes regular temporary and daily workers The

ASEAP provides data with consistent coverage back to the year 1963 Unfortunately the income tax

statistics does not report information on daily workers before 2008

The total amount of wage income cannot be obtained from income tax statistics and thus computed

from National Accounts Wages and salaries in the table of income account by institutional sectors of

National Accounts net of employerrsquos social contribution are the most comprehensive however they

include earnings of workers who are not classified as employed in the ASEAP The wage income of

this group is estimated to account for 67 of wage and salaries in National Accounts in 200911

Because we do not have relevant data to compute the figure for other years we deflate the wage and

salaries of National accounts for other years by the same rate of 67

The amount of wage and salaries is available in National Accounts since 1975 For earlier years we

extrapolated our estimate in 1975 by using the growth rate of the compensation of employees

presented in the table of distribution of national income in National Accounts published by the Bank

of Korea (1982) The amounts of total and average wage income are converted into those at constant

2010 prices by using the consumer price index The data are presented in Table B1

B3 Top Wage Numerator

The data on the top wage income are obtained by using the number of taxpayers and the amount of

income by income brackets provided by income tax statistics To estimate the income shares of top

percentiles we utilize the same method of Pareto interpolation as presented in A31 Due to the fact

that the information provided by the income tax statistics varies over years we made assumptions to

compute the top wage income Because we already explained the data on wage income for the periods

10

The ASEAP defines a worker as employed if he or she works more than one hour for pay during a surveyed

week which is much shorter than the time span for income tax statistics which detect the employment based

on the record of pay during a year

11 The income tax statistics in 2009 allows us to estimate the proportion of income earned by daily workers who

are not classified as employed in the ASEAP The income level of this group of workers is very low By

assuming that workers with a lower level of wage income in the income tax statistics tend to be classified as

unemployed we compute the amount of wage income accruing to the workers who should not be classified as

employed so that the number of employment in the income tax statistics may equal the total employment in

the ASEAP This is estimated to be 67 of wage and salaries in National Accounts in 2009

11

of 1995-2010 and 1979-1985 in A34 we focus on the data of the earlier period here

The data on income tax for the period of 1973-78 are taken from Juyo Saemu Tonggae[Statistics on

Major Tax Affairs] an unpublished internal document reported in 1981 This source provides the

number of taxpayers and the amount of tax paid by income brackets without specifying the amount of

wage income It is similar to the situation of Case B data in A32 In A32 we estimate the average

income of an income bracket by estimating d when the average income is specified as L+(H-L)d

where L and H are the upper and lower thresholds respectively Because we know the total income

we assume that d is constant in all the income brackets and thus we can estimate d However we do

not have information on total wage income here Thus we assume that the average wage income is

15L for the highest income bracket and therefore compute the average wage income for other

income brackets by fixing d equal to 04 which is based on the estimate from the adjacent year when

the data are available to estimate d Finally we compute the total wage income by income brackets by

multiplying the number of taxpayers and the average wage income

The data for 1968-72 are taken from Kuksae Tonggae Yeonbo [Statistical Yearbook of National Tax]

which provides the tax rate the number of taxpayers the amount of income and tax paid by income

brackets The amount of income in 1970-72 can be used directly because it equals the total wage

income to workers However in 1969-68 we have data on the amount of net taxable income which

needs to be converted to the amount of wage income taxpayers earned Since the conversion rate

cannot be estimated based on the data for this period we use the conversion rate by income brackets

for 1970 instead The conversion rate in 1970 is the ratio of total wage income to net taxable income

which is estimated by using the tax rate and the amount of tax paid by income brackets

The Statistical Yearbook of National Tax in 1957-67 provides two kinds of tables on income tax

statistics One is the table which provides the tax rate the number of taxpayers and the amount of

income by income brackets The information from this table is adequate for our purpose yet income

bracket is too coarse to be used with a small number of brackets The other table divides income

groups into finer brackets but provides only the number of taxpayers It is similar to Case B data in

A32 Thus we apply the same method as used for Case B data to the latter table and estimate the

amount of income by income brackets We also use the conversion rate for 1970 to convert the amount

of net taxable income into total wage income for this period because the table provides the amount of

net taxable income only

The threshold income and the average income for top income groups are presented in Tables B2 and

B3 They are also converted to constant 2010 prices by using the consumer price index Top income

shares are presented in Table B4 Although wage income tax statistics go back to the year 1957 we

can estimate the top income shares since 1963 because the ASEAP is available since 1963

B4 Marginal Tax Rates for Top Wage Income Earners

12

The marginal tax rates(MTRs) at the wage income threshold for the top wage income groups such

as the top 10 1 01 and 001 are estimated by using the method of Moriguchi and Saez (2008

Appendix C3) We assume that a taxpayer at each threshold income has only wage income and forms

a household with a non-working spouse and two dependent children We compute the net taxable

income by subtracting exemptions and deductions based on the income tax law in the corresponding

years from the threshold income and use the tax schedule to obtain the MTRs The estimates of MTRs

are presented in Table B5

By using the MTR at each threshold income we can obtain the MTR for the average taxpayer of

each top income group To obtain the MTR of the average taxpayer in the top 01 group we take the

weighted average of the average taxpayers of the top 001 and the top 01-001

ltInsert Table A1 ~ Table A5gt

ltInsert Table B1 ~ Table B5gt

ltInsert Figure A1gt

13

Table A1 Adult Population Number of Taxpayers Income and CPI

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) Total income and average income are at constant 2010 prices

Total adult

population(a

ge 20 and

over)

Toal incomeAverage

incomeCPI

(thousands)Global

income tax

Wage

income tax

Global

income tax

Wage

income tax(billion won)

(thousand

won)(2010=100)

A B C BA CA D DA E

1933 11094 154 14 14107 1272 00000103

1934 11262 173 15 14280 1268 00000114

1935 11432 193 17 16170 1414 00000122

1936 11520 198 17 16051 1393 00000129

1937 11609 237 20 19104 1646 00000140

1938 11699 269 23 18743 1602 00000153

1939 11789 276 23 16491 1399 00000196

1940 11880 362 31 19782 1665 00000205

1941 11992 534 45 00000213

1942 12105 576 48 00000232

1976 17959 402 22 83236 4635 126

1977 18592 443 24 94564 5086 139

1978 19249 475 25 111224 5778 159

1979 19941 551 4889 28 245 119086 5972 189

1980 20653 589 5005 29 242 107503 5205 243

1981 21386 612 5888 29 275 111687 5222 295

1982 22109 714 6041 32 273 120347 5443 316

1983 22805 682 6595 30 289 131324 5759 326

1984 23475 748 7071 32 301 148740 6336 334

1985 24093 762 7124 32 296 161995 6724 342

1986 24702 855 35 185049 7491 352

1987 25325 662 26 209937 8290 362

1988 25962 704 27 233492 8993 388

1989 26637 637 24 256211 9618 410

1990 27454 740 27 283125 10313 445

1991 28140 828 29 318729 11327 487

1992 28818 934 32 344085 11940 517

1993 29464 1129 38 368007 12490 542

1994 30078 1256 42 404667 13454 576

1995 30659 1338 7198 44 235 447923 14610 602

1996 31168 1216 6958 39 223 486670 15614 632

1997 31689 1254 6944 40 219 498359 15727 660

1998 32134 1166 6269 36 195 477469 14859 709

1999 32645 1267 5520 39 169 487741 14941 715

2000 33738 1529 5934 45 176 512345 15186 731

2001 34401 1669 6447 49 187 519834 15111 761

2002 35021 1842 6188 53 177 534899 15274 782

2003 35598 1905 6258 54 176 543903 15279 809

2004 36072 1943 6268 54 174 559652 15515 838

2005 36437 2279 6107 63 168 579632 15908 861

2006 36961 2736 6621 74 179 601400 16271 881

2007 37425 3074 7749 82 207 619847 16562 903

2008 37971 3584 7981 94 210 616895 16247 945

2009 38440 3571 8541 93 222 617346 16060 971

2010 38946 3785 9244 97 237 638059 16383 1000

Number of taxpayers

(thousands)

Taxpayeradult

population ()

14

Table A2 Threshold Income of Top Income Groups

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1933 185136 74267 46849 16099 10574

1934 204486 74608 47750 15359 9576

1935 203989 75431 48587 15589 9686

1936 186339 71454 45799 14952 9290

1937 230471 89483 54298 16233 10076

1938 223658 84185 52474 16527 10425

1939 204640 71145 46085 13768 8762 2902

1940 244524 83155 54223 16849 10231 3383

1979 134528 76165 59973 32722 25451 12746 8620

1980 131681 71280 49722 30250 23515 12118 7681

1981 129168 69434 53369 28930 22590 11868 8458

1982 135663 70123 54625 31498 24662 13301 8728

1983 148668 80784 62378 34124 26454 14289 9013

1984 164008 83902 65254 35865 28537 14661 9276

1985 176154 83921 64847 36524 28729 15995 10274

1995 491648 203713 145270 78818 59355 37894 27176

1996 537942 235608 167108 87999 65729 45555 38402

1997 565959 246090 176106 92871 70157 46914 39543

1998 448465 192108 138262 78374 59922 42164 35935

1999 486342 224510 163549 89336 67751 44563 37462

2000 567539 228883 179544 100104 76304 48019 39997

2001 638609 255093 190016 103341 78355 48281 39660

2002 690605 274862 208094 96713 86720 50171 40455

2003 715838 282083 211466 97854 88245 50879 40844

2004 798205 307253 206042 114137 93132 53643 37672

2005 856008 321897 216150 110785 88853 49590 34004

2006 948605 361709 246695 123879 99602 62413 41989

2007 1070223 398680 268306 125248 96463 58170 38765

2008 1051085 399573 270898 125218 97522 57701 37631

2009 1022569 397032 270642 124348 96264 56430 36053

2010 1104380 423467 283886 135564 104948 57063 36201

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

3

A2 Control Totals for Population and Income

To compute the top income shares we need to define the denominators (or control totals) for

population and income It is desirable to define the population denominator as the total number of

income earners yet it is not possible to compute it due to data limitations Thus we define the

population denominator as the total number of adults defined as 20 years old and above Because

studies on other countries adopt the same definition it is good for an international comparison We

obtain the total number of adults from the population statistics published by the Korea Statistical

Office For the period before liberation we interpolate the data by using the rate of change between

the population census in 1930 1935 1940 and 1944 The number of adults is presented in Table A1

The control total for income is obtained from National Accounts The table of income account by

institutional sectors in National Accounts provides the data on the amount of income accruing to

households and nonprofit institutions serving households by source such as compensation of

employees operating surplus and property income From this we need to subtract the items which do

not belong to the earnings of individual households usually defined as earned cash income They are

employerrsquos social contribution in compensation of employees imputed rents to owner-occupier in

operating surplus and financial intermediation services indirectly measured (FISIM) in the financial

income We compute the control total for income by subtracting these items from the household

income in National Accounts2

For the colonial period we use the National Accounts constructed by Kim ed (2012) Because the

income account by institutional sectors was not constructed in this study we compute the household

income by subtracting the imputed rents from the sum of compensation of employees and operating

surplus Although we have to exclude the retained corporate income from the operating surplus we

cannot make adjustment for this because we do not have the relevant information However it will not

make much difference for our estimation of the income denominator during this period because the

retained corporate income would be a relatively small amount The data on the income denominator is

presented in Table A13 The ratio of global income taxpayers to the total adult population increased

over time but remained low It was less than 5 before liberation and less than 10 after liberation It

implies that a large proportion of taxpayers only paid the wage income tax which was withheld at

2 The household income in National Accounts also includes the income of nonprofit institutions serving households

which should be excluded for our purpose However due to the limitations of data we cannot make adjustment for

this However the amount is relatively too small to make much difference

3 The income denominator cannot be computed for the period of 1943-74 The income denominator for the period of

1941-42 cannot be computed since Kim edrsquos (2012) study ends in 1940 although the income tax statistics are

available until 1942 The national accounts in Korea provide the income by institutional sectors after 1975

4

source Table A1 also presents the total income and average income per adult at constant 2010 prices

along with consumer price index to be used for the conversion The data on consumer price index

since 1965 are taken from the web-based database (KOSIS) of the Korea Statistical Office Those

before 1940 are obtained from the deflator for private consumption estimated by Kim ed (2012 507)

We interpolate the data for the period between 1940 and 1965 by using the index for the Seoul area

estimated by Park and Kim (2011)

A3 Computing Top Income Shares

A31 Pareto interpolation

We estimate the top income shares by using the number of taxpayers and the amount of income by

income brackets obtained from the income tax statistics To estimate the income shares of the top

fractiles such as the top 10 1 01 and 001 we use the same Pareto interpolation method as

Piketty and Saez (2001 39) Pareto distribution has a cumulative distribution function specified as

F(y)=1-(ky)a where k and a are constants and a is called a Pareto coefficient The distribution has a

property such that the average income of taxpayers with an income level above a threshold income y

is proportional to y by factor of b and b=a(a-1)

By using this property we can estimate the top income shares as follows First we compute the

cumulative proportion of taxpayers and income by dividing the number of cumulative taxpayers and

the amount of cumulative income in each income bracket in the income tax statistics by the control

total of population and income defined in A1 respectively Second we select the income bracket

which has the cumulative proportion of taxpayers p closest to the top fractiles such as the top 1 If

the lower income threshold for this bracket is s using the above property of the Pareto distribution we

can estimate the Pareto coefficient a(= b(b-1)) and k(=sp1a

) Once we estimate a and k we can

compute the income share of the corresponding income group based on the relationship that 1-

F(y)=(ky)a For example if we compute the top 1 income shares we place 1-F(y) equal to 001 and

solve the equation in order to get the threshold income y Then the average income of the top

percentile is the product of y and b The income share of intermediate fractiles such as the top 1-01

can be computed by the difference between income shares of the top 1 and the top 01

A32 Adjustment of Income Tax Statistics for the Colonial Period

Income tax to be paid during the colonial period was counted by applying a corresponding tax rate

to the householdrsquos net taxable income which equals the sum of income earned by all household

members net of deductions Then the amount of tax to be paid by the household was allotted to each

5

household member by the share of each member in the total household income Due to this feature of

the tax system at that time the income tax statistics of this period provide two kinds of tabulations

One tabulation (Case A data) provides the number of taxpayers defined as household and the amount

of net taxable income by brackets of the net taxable income The other tabulation (Case B data)

provides the number of taxpayers defined as individual by tax-paid brackets without any information

on income

To adjust the data for our purpose first we compute the amount of income by adding deductions to

the net taxable income The deductions during this period consisted of deductions for wage income

dependent family and insurance the deduction rate was scheduled to rise with an income decrease

We also make adjustment for the deduction for dividends the tax on which was levied after deducting

40 of dividends The deduction rate of dividends is thought to increase as the amount of dividends

increases unlike the deduction for wage income Because the data do not provide the deductions by

income brackets we apply the ratio of total deductions to the total net taxable income in order to

obtain the total income regardless of income bracket4

Second we should make an adjustment so that the tabulation in terms of household unit may be

converted to the one in terms of an individual unit Moriguchi and Saez (2008) made an adjustment in

the Case A data for the pre-war period of Japan by substituting household income for household

headrsquos income They considered that this adjustment does not make much difference because the

income of household heads accounts for more than 95 of the household income However it may

lead to an upward or downward bias in the estimation depending on the income groups Therefore we

compare the estimates from Case A data and Case B data By using Case B data with tax-paid brackets

we can compute the net taxable income corresponding to tax-paid in Case B data because we have the

corresponding tax rates for all the brackets of the net taxable income It allows us to compute the

number of taxpayers by brackets of net taxable income in terms of individual household members

from Case B data However the Case B data do not provide the amount of net taxable income by

brackets Therefore we assume that the average net taxable income for each bracket equals L+(H-

L)d where L and H are the lower and upper thresholds of the bracket5 Although d may be different

among brackets it is assumed that d is constant in order to compute d based on the total amount of net

taxable income from Case A data6 Once we compute d we obtain the amount of income by income

4 The ratios for wage income and deductions are 69-99 and 09-22 respectively

5 The coefficient d locates the average in between L and H For instance if d equals 04 the average is greater than L

by 40 of difference between H and L For the brackets of top incomes the number of taxpayers tends to fall as the

income increases Thus the average income of the bracket will be less than the midpoint which implies that d is

between 0 and 05

6 When there is only one taxpayer in a bracket usually observed in the highest income bracket we can use the amount

of income directly from Case A data Although the assumption of constant d is restrictive it will not make a

6

brackets

Comparing the estimates of top income shares based on the two methods mentioned above we find

that the estimate of the top 001 income shares based on Case A data is slightly greater than that

based on the Case B data whereas it is the other way round for top 1 income shares However there

is not much difference between the top 01 and 05 income shares It is due to two biasing factors

which work in opposite direction when we estimate the top income shares based on Case A data by

substituting household income for household headrsquos income The first factor causes an upward bias

since we overestimate household head income by including the incomes of other household members

in household head income The second factor gives rise to a downward bias as we enlarge the top

income group to lower income levels due to the omission of high-income members other than

household heads in Case B data In the estimation of the top 001 income shares the first factor

dominates the second factor and vice versa in the estimation of the top 1 income shares7

In this paper we use Case B data based on the individual unit in order to make the top income

shares series in the colonial period consistent with those after liberation

A33 Combining Global Income Tax Statistics and Wage Income Tax Statistics

Due to the extensive withholding system a small portion of taxpayers are required to file the global

income tax returns as Table A1 shows In particular taxpayers with wage income do not have to file

global income tax returns if the amount of income from other sources does not exceed a certain level

and the wage income tax is withheld at source in this case Therefore we complement global income

tax statistics with wage income tax statistics in order to make up for a large number of wage income

earners missing in the global income tax statistics Because many taxpayers who file global income

tax returns are also counted in wage income tax statistics we have to remove those overlapping

taxpayers when we combine the two income tax statistics

Global income tax statistics provide the tabulation of number of taxpayers and the amount of

income by income sources and by brackets of total income The wage income in this tabulation is the

double-counted amount of income when we combine the statistics To subtract this part of the income

we have to make the income brackets of the two income tax statistics correspond each other Faced

with a similar problem Moriguchi and Saez (2008 Appendix A31) introduced an assumption that

significant error because the total amount of net taxable income is obtained from actual data

7 Moriguchi and Saez (2008) used the data similar to Case A data when they estimated the top income shares in Japan

for the pre-war period In this case the estimate of the top 1 income shares using the data based on the household

unit has a significant downward bias compared with the estimate based on an individual unit The bias becomes

larger in the estimation of the top 5 income shares

7

those with higher total income tend to have higher wage income That is they assumed that the ratios

of wage income to total income are constant for each bracket8 Then they computed the ratios by

brackets of total income and converted the brackets of total income to those of wage income by

multiplying the thresholds of total income by the ratios This method just shifts the thresholds with the

number of taxpayers and the amount of income unchanged

Then we remove the double-counted part by subtracting the number of taxpayers and the amount of

wage income from the global income tax We add up the global income tax statistics and the wage

income tax statistics net of the double-counted part To remove the overlapping part and to add up the

two income statistics we also have to make different income brackets of the two statistics correspond

to each other For this we have to split the brackets of one tax statistics further with new thresholds

set by using the other tax statistics For this we use the Pareto interpolation method9

A34 Additional Adjustments Made by Periods

To overcome the limitations of data we made additional assumptions if allowed The data for the

period of 2005-2010 are sufficient enough to estimate the top income shares without any adjustment

However the data for 1995-2004 are not complete as those for 2005-2010 The tabulations of global

income tax for 1995-2004 provide the amount of income by brackets of net taxable income rather than

total income They should be converted into the amount of total income by income brackets We

8 This assumption of Moriguchi and Saez (2008) may not reflect reality if the distribution of income by sources varies

much among individual taxpayers Thus we try to estimate the top income shares by making different assumptions

on the distribution However the estimates are not so much different from 119 the estimate based on the method

of Saez and Moriguchi (2008) Thus we adopt the method of Saez and Moriguchi (2008) which allows us to

compare our estimate of top income shares in Korea with that in Japan

9 This method is different from the Pareto interpolation explained in A31 which does not use the data on the upper

thresholds The Pareto interpolation in A31 uses only the lower thresholds and the number of taxpayers and their

income above the lower thresholds This method which considers the income bracket as an open upper interval is

suitable when we estimate the top fractiles income shares however it is not proper when we create additional

brackets within an income bracket by a new threshold Therefore we use an interpolation method which uses both

the upper and lower thresholds of an income bracket First to interpolate the number of taxpayers we use the

equation H(yi+1)H(yi)=(yiyi+1)α induced from the Pareto cumulative distribution function where yi and yi+1 are the

lower and upper thresholds of the corresponding income bracket respectively and H is the share of taxpayers with

income higher than the threshold income y From the equation we can obtain α the Pareto coefficient of the

income bracket which is different from a in the equation of A31 If we substitute yc a new threshold income for yi

in the above equation we obtain the number of taxpayer in a corresponding new income bracket Similarly we can

interpolate the amount of income by using the equation G(yi+1)G(yi)=(yiyi+1)α-1

where G is the share of income

above the threshold income y

8

compute the amount of deductions and exemptions (the difference between income and net taxable

income) by using the data on the tax rate and the tax paid by brackets of net taxable income in income

tax statistics and obtain the data by income brackets The tabulations of wage income tax also provide

the amount of net taxable income by brackets We also need to convert the net taxable income into

total income by adding exemptions and deductions to the net taxable income However the data

source just provides the total amount of wage income without income brackets Thus we compute the

ratios of wage income to net taxable wage income by income brackets from the data of year 2005 and

apply the ratios to other years in order to convert the net taxable income into total wage income

Information needed to compute the double-counted amount of income when we combine the global

income tax and wage income tax in A33 is not available before 2005 Thus from the data for the year

2006 we compute the ratios of the double-counted taxpayers to total taxpayers and their wage income

to total wage income respectively We use the ratios for the period of 1995-2005 in order to remove

the double-counted parts by income brackets

The data for 1979-85 are similar to those for 1995-2004 as mentioned above We do not have to

make adjustments for wage income since we can obtain the amount of wage income by income

brackets for this period However we do not make an adjustment for the overlapping parts for this

period when we combine the global income statistics and wage income statistics First of all the

relevant information is not available for this period Second this period is far too old to use the ratios

computed from the data of year 2006 Third during this period only 3 of taxpayers filed global

income tax returns Thus there were less overlapping taxpayers during this period compared with the

more recent years During this period those who earned a large amount of financial income were

exempt from filing global income tax returns as long as the financial income was their only income

source Overlapping taxpayers not adjusted in this period tend to yield an upward bias in estimating

the top income shares whereas the absence of financial global income tax leads to a downward bias

No additional adjustment is needed for the period of 1933-40 except for the adjustments made in

A32 We also estimate the top income shares based only on the global income tax statistics which

are available since 1976 Although the top income shares estimated this way has a shortcoming for its

narrow coverage of taxpayers compared with those estimated after combining two kinds of income tax

statistics they allow us to estimate the continuous series in the top income shares over 1976-2010

without missing periods

The estimates of the threshold income and the average income for the top percentiles are presented

in Tables A2 and A3 They are converted into real terms at constant 2010 prices by using consumer

price index The estimates of top income shares are presented in Table A4

A4 Top Income Composition

9

The income tax statistics before liberation provide the amount of income by sources without

dividing the taxpayers into separate income brackets Therefore the reported figures under the title of

the top 1 income composition in Table A5 for 1933-42 are not exactly those for top 1 The size of

top income groups varies from the top 14 in 1933 to the top 48 in 1942 We cannot compute the

top income composition between 1942 and 2006 since the income tax statistics do not provide

relevant information for computing the top income composition We obtain income composition for

the top 10 1 01 and 005 for the period of 2007-10 by combining the statistics of global

income tax and wage income tax

The top income composition is presented in Table A5 by income sources such as wage

income(wages salaries bonuses and pension) business income(unincorporated business profits farm

income and self-employment income) rents (rents from farmland and real estate) interest and

dividends After liberation rents from farmland disappeared due to the land reform the rents from real

estate were then included as business income

B Top Wage Income Shares

B1 Wage Income Taxation Data

We cannot estimate the top wage income shares before liberation because the income tax statistics

during this period do not provide data by sources of income After liberation income taxes were

separately withheld at source The Kuksae Tonggae Yonbo [Statistical Yearbook of National Tax]

(Semu Tonggae Yonbo [Statistical Yearbook of Tax Affairs] before 1965) provides the data on the

number of taxpayers the amount of income tax paid and tax rates by income brackets back to the

year 1957 As aforementioned the data source does not provide statistics on separate tax withheld at

source such as wage income tax for the years 1976-1994 Although the data on wage income tax for

1973-85 can be obtained from an internal source they are missing for the years 1986-94

B2 Total Wage Denominator

We need to define control totals for total wage earners and total wage income in order to estimate

the top wage income shares The number of total wage earners changes depending on the sources of

data due to the different coverage of workers The total number of employment in the Kyungje

Hwaldong Ingu Yonbo [Annual Survey on Economically Active Population(ASEAP)] published by

Korea Statistical Office is found to be considerably lower than the number of employment from

income tax statistics in recent years which provide the comprehensive information on wage income

earners including taxpayers workers with wage level below the exemption point and daily workers

10

The reason is that among the workers counted in income tax statistics there are some who are not

classified as employed in the ASEAP It is due to the difference in detecting the status of employment

between the two data sources10

Here we define the control total for wage income earners as the total

number of employment in the ASEAP which includes regular temporary and daily workers The

ASEAP provides data with consistent coverage back to the year 1963 Unfortunately the income tax

statistics does not report information on daily workers before 2008

The total amount of wage income cannot be obtained from income tax statistics and thus computed

from National Accounts Wages and salaries in the table of income account by institutional sectors of

National Accounts net of employerrsquos social contribution are the most comprehensive however they

include earnings of workers who are not classified as employed in the ASEAP The wage income of

this group is estimated to account for 67 of wage and salaries in National Accounts in 200911

Because we do not have relevant data to compute the figure for other years we deflate the wage and

salaries of National accounts for other years by the same rate of 67

The amount of wage and salaries is available in National Accounts since 1975 For earlier years we

extrapolated our estimate in 1975 by using the growth rate of the compensation of employees

presented in the table of distribution of national income in National Accounts published by the Bank

of Korea (1982) The amounts of total and average wage income are converted into those at constant

2010 prices by using the consumer price index The data are presented in Table B1

B3 Top Wage Numerator

The data on the top wage income are obtained by using the number of taxpayers and the amount of

income by income brackets provided by income tax statistics To estimate the income shares of top

percentiles we utilize the same method of Pareto interpolation as presented in A31 Due to the fact

that the information provided by the income tax statistics varies over years we made assumptions to

compute the top wage income Because we already explained the data on wage income for the periods

10

The ASEAP defines a worker as employed if he or she works more than one hour for pay during a surveyed

week which is much shorter than the time span for income tax statistics which detect the employment based

on the record of pay during a year

11 The income tax statistics in 2009 allows us to estimate the proportion of income earned by daily workers who

are not classified as employed in the ASEAP The income level of this group of workers is very low By

assuming that workers with a lower level of wage income in the income tax statistics tend to be classified as

unemployed we compute the amount of wage income accruing to the workers who should not be classified as

employed so that the number of employment in the income tax statistics may equal the total employment in

the ASEAP This is estimated to be 67 of wage and salaries in National Accounts in 2009

11

of 1995-2010 and 1979-1985 in A34 we focus on the data of the earlier period here

The data on income tax for the period of 1973-78 are taken from Juyo Saemu Tonggae[Statistics on

Major Tax Affairs] an unpublished internal document reported in 1981 This source provides the

number of taxpayers and the amount of tax paid by income brackets without specifying the amount of

wage income It is similar to the situation of Case B data in A32 In A32 we estimate the average

income of an income bracket by estimating d when the average income is specified as L+(H-L)d

where L and H are the upper and lower thresholds respectively Because we know the total income

we assume that d is constant in all the income brackets and thus we can estimate d However we do

not have information on total wage income here Thus we assume that the average wage income is

15L for the highest income bracket and therefore compute the average wage income for other

income brackets by fixing d equal to 04 which is based on the estimate from the adjacent year when

the data are available to estimate d Finally we compute the total wage income by income brackets by

multiplying the number of taxpayers and the average wage income

The data for 1968-72 are taken from Kuksae Tonggae Yeonbo [Statistical Yearbook of National Tax]

which provides the tax rate the number of taxpayers the amount of income and tax paid by income

brackets The amount of income in 1970-72 can be used directly because it equals the total wage

income to workers However in 1969-68 we have data on the amount of net taxable income which

needs to be converted to the amount of wage income taxpayers earned Since the conversion rate

cannot be estimated based on the data for this period we use the conversion rate by income brackets

for 1970 instead The conversion rate in 1970 is the ratio of total wage income to net taxable income

which is estimated by using the tax rate and the amount of tax paid by income brackets

The Statistical Yearbook of National Tax in 1957-67 provides two kinds of tables on income tax

statistics One is the table which provides the tax rate the number of taxpayers and the amount of

income by income brackets The information from this table is adequate for our purpose yet income

bracket is too coarse to be used with a small number of brackets The other table divides income

groups into finer brackets but provides only the number of taxpayers It is similar to Case B data in

A32 Thus we apply the same method as used for Case B data to the latter table and estimate the

amount of income by income brackets We also use the conversion rate for 1970 to convert the amount

of net taxable income into total wage income for this period because the table provides the amount of

net taxable income only

The threshold income and the average income for top income groups are presented in Tables B2 and

B3 They are also converted to constant 2010 prices by using the consumer price index Top income

shares are presented in Table B4 Although wage income tax statistics go back to the year 1957 we

can estimate the top income shares since 1963 because the ASEAP is available since 1963

B4 Marginal Tax Rates for Top Wage Income Earners

12

The marginal tax rates(MTRs) at the wage income threshold for the top wage income groups such

as the top 10 1 01 and 001 are estimated by using the method of Moriguchi and Saez (2008

Appendix C3) We assume that a taxpayer at each threshold income has only wage income and forms

a household with a non-working spouse and two dependent children We compute the net taxable

income by subtracting exemptions and deductions based on the income tax law in the corresponding

years from the threshold income and use the tax schedule to obtain the MTRs The estimates of MTRs

are presented in Table B5

By using the MTR at each threshold income we can obtain the MTR for the average taxpayer of

each top income group To obtain the MTR of the average taxpayer in the top 01 group we take the

weighted average of the average taxpayers of the top 001 and the top 01-001

ltInsert Table A1 ~ Table A5gt

ltInsert Table B1 ~ Table B5gt

ltInsert Figure A1gt

13

Table A1 Adult Population Number of Taxpayers Income and CPI

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) Total income and average income are at constant 2010 prices

Total adult

population(a

ge 20 and

over)

Toal incomeAverage

incomeCPI

(thousands)Global

income tax

Wage

income tax

Global

income tax

Wage

income tax(billion won)

(thousand

won)(2010=100)

A B C BA CA D DA E

1933 11094 154 14 14107 1272 00000103

1934 11262 173 15 14280 1268 00000114

1935 11432 193 17 16170 1414 00000122

1936 11520 198 17 16051 1393 00000129

1937 11609 237 20 19104 1646 00000140

1938 11699 269 23 18743 1602 00000153

1939 11789 276 23 16491 1399 00000196

1940 11880 362 31 19782 1665 00000205

1941 11992 534 45 00000213

1942 12105 576 48 00000232

1976 17959 402 22 83236 4635 126

1977 18592 443 24 94564 5086 139

1978 19249 475 25 111224 5778 159

1979 19941 551 4889 28 245 119086 5972 189

1980 20653 589 5005 29 242 107503 5205 243

1981 21386 612 5888 29 275 111687 5222 295

1982 22109 714 6041 32 273 120347 5443 316

1983 22805 682 6595 30 289 131324 5759 326

1984 23475 748 7071 32 301 148740 6336 334

1985 24093 762 7124 32 296 161995 6724 342

1986 24702 855 35 185049 7491 352

1987 25325 662 26 209937 8290 362

1988 25962 704 27 233492 8993 388

1989 26637 637 24 256211 9618 410

1990 27454 740 27 283125 10313 445

1991 28140 828 29 318729 11327 487

1992 28818 934 32 344085 11940 517

1993 29464 1129 38 368007 12490 542

1994 30078 1256 42 404667 13454 576

1995 30659 1338 7198 44 235 447923 14610 602

1996 31168 1216 6958 39 223 486670 15614 632

1997 31689 1254 6944 40 219 498359 15727 660

1998 32134 1166 6269 36 195 477469 14859 709

1999 32645 1267 5520 39 169 487741 14941 715

2000 33738 1529 5934 45 176 512345 15186 731

2001 34401 1669 6447 49 187 519834 15111 761

2002 35021 1842 6188 53 177 534899 15274 782

2003 35598 1905 6258 54 176 543903 15279 809

2004 36072 1943 6268 54 174 559652 15515 838

2005 36437 2279 6107 63 168 579632 15908 861

2006 36961 2736 6621 74 179 601400 16271 881

2007 37425 3074 7749 82 207 619847 16562 903

2008 37971 3584 7981 94 210 616895 16247 945

2009 38440 3571 8541 93 222 617346 16060 971

2010 38946 3785 9244 97 237 638059 16383 1000

Number of taxpayers

(thousands)

Taxpayeradult

population ()

14

Table A2 Threshold Income of Top Income Groups

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1933 185136 74267 46849 16099 10574

1934 204486 74608 47750 15359 9576

1935 203989 75431 48587 15589 9686

1936 186339 71454 45799 14952 9290

1937 230471 89483 54298 16233 10076

1938 223658 84185 52474 16527 10425

1939 204640 71145 46085 13768 8762 2902

1940 244524 83155 54223 16849 10231 3383

1979 134528 76165 59973 32722 25451 12746 8620

1980 131681 71280 49722 30250 23515 12118 7681

1981 129168 69434 53369 28930 22590 11868 8458

1982 135663 70123 54625 31498 24662 13301 8728

1983 148668 80784 62378 34124 26454 14289 9013

1984 164008 83902 65254 35865 28537 14661 9276

1985 176154 83921 64847 36524 28729 15995 10274

1995 491648 203713 145270 78818 59355 37894 27176

1996 537942 235608 167108 87999 65729 45555 38402

1997 565959 246090 176106 92871 70157 46914 39543

1998 448465 192108 138262 78374 59922 42164 35935

1999 486342 224510 163549 89336 67751 44563 37462

2000 567539 228883 179544 100104 76304 48019 39997

2001 638609 255093 190016 103341 78355 48281 39660

2002 690605 274862 208094 96713 86720 50171 40455

2003 715838 282083 211466 97854 88245 50879 40844

2004 798205 307253 206042 114137 93132 53643 37672

2005 856008 321897 216150 110785 88853 49590 34004

2006 948605 361709 246695 123879 99602 62413 41989

2007 1070223 398680 268306 125248 96463 58170 38765

2008 1051085 399573 270898 125218 97522 57701 37631

2009 1022569 397032 270642 124348 96264 56430 36053

2010 1104380 423467 283886 135564 104948 57063 36201

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

4

source Table A1 also presents the total income and average income per adult at constant 2010 prices

along with consumer price index to be used for the conversion The data on consumer price index

since 1965 are taken from the web-based database (KOSIS) of the Korea Statistical Office Those

before 1940 are obtained from the deflator for private consumption estimated by Kim ed (2012 507)

We interpolate the data for the period between 1940 and 1965 by using the index for the Seoul area

estimated by Park and Kim (2011)

A3 Computing Top Income Shares

A31 Pareto interpolation

We estimate the top income shares by using the number of taxpayers and the amount of income by

income brackets obtained from the income tax statistics To estimate the income shares of the top

fractiles such as the top 10 1 01 and 001 we use the same Pareto interpolation method as

Piketty and Saez (2001 39) Pareto distribution has a cumulative distribution function specified as

F(y)=1-(ky)a where k and a are constants and a is called a Pareto coefficient The distribution has a

property such that the average income of taxpayers with an income level above a threshold income y

is proportional to y by factor of b and b=a(a-1)

By using this property we can estimate the top income shares as follows First we compute the

cumulative proportion of taxpayers and income by dividing the number of cumulative taxpayers and

the amount of cumulative income in each income bracket in the income tax statistics by the control

total of population and income defined in A1 respectively Second we select the income bracket

which has the cumulative proportion of taxpayers p closest to the top fractiles such as the top 1 If

the lower income threshold for this bracket is s using the above property of the Pareto distribution we

can estimate the Pareto coefficient a(= b(b-1)) and k(=sp1a

) Once we estimate a and k we can

compute the income share of the corresponding income group based on the relationship that 1-

F(y)=(ky)a For example if we compute the top 1 income shares we place 1-F(y) equal to 001 and

solve the equation in order to get the threshold income y Then the average income of the top

percentile is the product of y and b The income share of intermediate fractiles such as the top 1-01

can be computed by the difference between income shares of the top 1 and the top 01

A32 Adjustment of Income Tax Statistics for the Colonial Period

Income tax to be paid during the colonial period was counted by applying a corresponding tax rate

to the householdrsquos net taxable income which equals the sum of income earned by all household

members net of deductions Then the amount of tax to be paid by the household was allotted to each

5

household member by the share of each member in the total household income Due to this feature of

the tax system at that time the income tax statistics of this period provide two kinds of tabulations

One tabulation (Case A data) provides the number of taxpayers defined as household and the amount

of net taxable income by brackets of the net taxable income The other tabulation (Case B data)

provides the number of taxpayers defined as individual by tax-paid brackets without any information

on income

To adjust the data for our purpose first we compute the amount of income by adding deductions to

the net taxable income The deductions during this period consisted of deductions for wage income

dependent family and insurance the deduction rate was scheduled to rise with an income decrease

We also make adjustment for the deduction for dividends the tax on which was levied after deducting

40 of dividends The deduction rate of dividends is thought to increase as the amount of dividends

increases unlike the deduction for wage income Because the data do not provide the deductions by

income brackets we apply the ratio of total deductions to the total net taxable income in order to

obtain the total income regardless of income bracket4

Second we should make an adjustment so that the tabulation in terms of household unit may be

converted to the one in terms of an individual unit Moriguchi and Saez (2008) made an adjustment in

the Case A data for the pre-war period of Japan by substituting household income for household

headrsquos income They considered that this adjustment does not make much difference because the

income of household heads accounts for more than 95 of the household income However it may

lead to an upward or downward bias in the estimation depending on the income groups Therefore we

compare the estimates from Case A data and Case B data By using Case B data with tax-paid brackets

we can compute the net taxable income corresponding to tax-paid in Case B data because we have the

corresponding tax rates for all the brackets of the net taxable income It allows us to compute the

number of taxpayers by brackets of net taxable income in terms of individual household members

from Case B data However the Case B data do not provide the amount of net taxable income by

brackets Therefore we assume that the average net taxable income for each bracket equals L+(H-

L)d where L and H are the lower and upper thresholds of the bracket5 Although d may be different

among brackets it is assumed that d is constant in order to compute d based on the total amount of net

taxable income from Case A data6 Once we compute d we obtain the amount of income by income

4 The ratios for wage income and deductions are 69-99 and 09-22 respectively

5 The coefficient d locates the average in between L and H For instance if d equals 04 the average is greater than L

by 40 of difference between H and L For the brackets of top incomes the number of taxpayers tends to fall as the

income increases Thus the average income of the bracket will be less than the midpoint which implies that d is

between 0 and 05

6 When there is only one taxpayer in a bracket usually observed in the highest income bracket we can use the amount

of income directly from Case A data Although the assumption of constant d is restrictive it will not make a

6

brackets

Comparing the estimates of top income shares based on the two methods mentioned above we find

that the estimate of the top 001 income shares based on Case A data is slightly greater than that

based on the Case B data whereas it is the other way round for top 1 income shares However there

is not much difference between the top 01 and 05 income shares It is due to two biasing factors

which work in opposite direction when we estimate the top income shares based on Case A data by

substituting household income for household headrsquos income The first factor causes an upward bias

since we overestimate household head income by including the incomes of other household members

in household head income The second factor gives rise to a downward bias as we enlarge the top

income group to lower income levels due to the omission of high-income members other than

household heads in Case B data In the estimation of the top 001 income shares the first factor

dominates the second factor and vice versa in the estimation of the top 1 income shares7

In this paper we use Case B data based on the individual unit in order to make the top income

shares series in the colonial period consistent with those after liberation

A33 Combining Global Income Tax Statistics and Wage Income Tax Statistics

Due to the extensive withholding system a small portion of taxpayers are required to file the global

income tax returns as Table A1 shows In particular taxpayers with wage income do not have to file

global income tax returns if the amount of income from other sources does not exceed a certain level

and the wage income tax is withheld at source in this case Therefore we complement global income

tax statistics with wage income tax statistics in order to make up for a large number of wage income

earners missing in the global income tax statistics Because many taxpayers who file global income

tax returns are also counted in wage income tax statistics we have to remove those overlapping

taxpayers when we combine the two income tax statistics

Global income tax statistics provide the tabulation of number of taxpayers and the amount of

income by income sources and by brackets of total income The wage income in this tabulation is the

double-counted amount of income when we combine the statistics To subtract this part of the income

we have to make the income brackets of the two income tax statistics correspond each other Faced

with a similar problem Moriguchi and Saez (2008 Appendix A31) introduced an assumption that

significant error because the total amount of net taxable income is obtained from actual data

7 Moriguchi and Saez (2008) used the data similar to Case A data when they estimated the top income shares in Japan

for the pre-war period In this case the estimate of the top 1 income shares using the data based on the household

unit has a significant downward bias compared with the estimate based on an individual unit The bias becomes

larger in the estimation of the top 5 income shares

7

those with higher total income tend to have higher wage income That is they assumed that the ratios

of wage income to total income are constant for each bracket8 Then they computed the ratios by

brackets of total income and converted the brackets of total income to those of wage income by

multiplying the thresholds of total income by the ratios This method just shifts the thresholds with the

number of taxpayers and the amount of income unchanged

Then we remove the double-counted part by subtracting the number of taxpayers and the amount of

wage income from the global income tax We add up the global income tax statistics and the wage

income tax statistics net of the double-counted part To remove the overlapping part and to add up the

two income statistics we also have to make different income brackets of the two statistics correspond

to each other For this we have to split the brackets of one tax statistics further with new thresholds

set by using the other tax statistics For this we use the Pareto interpolation method9

A34 Additional Adjustments Made by Periods

To overcome the limitations of data we made additional assumptions if allowed The data for the

period of 2005-2010 are sufficient enough to estimate the top income shares without any adjustment

However the data for 1995-2004 are not complete as those for 2005-2010 The tabulations of global

income tax for 1995-2004 provide the amount of income by brackets of net taxable income rather than

total income They should be converted into the amount of total income by income brackets We

8 This assumption of Moriguchi and Saez (2008) may not reflect reality if the distribution of income by sources varies

much among individual taxpayers Thus we try to estimate the top income shares by making different assumptions

on the distribution However the estimates are not so much different from 119 the estimate based on the method

of Saez and Moriguchi (2008) Thus we adopt the method of Saez and Moriguchi (2008) which allows us to

compare our estimate of top income shares in Korea with that in Japan

9 This method is different from the Pareto interpolation explained in A31 which does not use the data on the upper

thresholds The Pareto interpolation in A31 uses only the lower thresholds and the number of taxpayers and their

income above the lower thresholds This method which considers the income bracket as an open upper interval is

suitable when we estimate the top fractiles income shares however it is not proper when we create additional

brackets within an income bracket by a new threshold Therefore we use an interpolation method which uses both

the upper and lower thresholds of an income bracket First to interpolate the number of taxpayers we use the

equation H(yi+1)H(yi)=(yiyi+1)α induced from the Pareto cumulative distribution function where yi and yi+1 are the

lower and upper thresholds of the corresponding income bracket respectively and H is the share of taxpayers with

income higher than the threshold income y From the equation we can obtain α the Pareto coefficient of the

income bracket which is different from a in the equation of A31 If we substitute yc a new threshold income for yi

in the above equation we obtain the number of taxpayer in a corresponding new income bracket Similarly we can

interpolate the amount of income by using the equation G(yi+1)G(yi)=(yiyi+1)α-1

where G is the share of income

above the threshold income y

8

compute the amount of deductions and exemptions (the difference between income and net taxable

income) by using the data on the tax rate and the tax paid by brackets of net taxable income in income

tax statistics and obtain the data by income brackets The tabulations of wage income tax also provide

the amount of net taxable income by brackets We also need to convert the net taxable income into

total income by adding exemptions and deductions to the net taxable income However the data

source just provides the total amount of wage income without income brackets Thus we compute the

ratios of wage income to net taxable wage income by income brackets from the data of year 2005 and

apply the ratios to other years in order to convert the net taxable income into total wage income

Information needed to compute the double-counted amount of income when we combine the global

income tax and wage income tax in A33 is not available before 2005 Thus from the data for the year

2006 we compute the ratios of the double-counted taxpayers to total taxpayers and their wage income

to total wage income respectively We use the ratios for the period of 1995-2005 in order to remove

the double-counted parts by income brackets

The data for 1979-85 are similar to those for 1995-2004 as mentioned above We do not have to

make adjustments for wage income since we can obtain the amount of wage income by income

brackets for this period However we do not make an adjustment for the overlapping parts for this

period when we combine the global income statistics and wage income statistics First of all the

relevant information is not available for this period Second this period is far too old to use the ratios

computed from the data of year 2006 Third during this period only 3 of taxpayers filed global

income tax returns Thus there were less overlapping taxpayers during this period compared with the

more recent years During this period those who earned a large amount of financial income were

exempt from filing global income tax returns as long as the financial income was their only income

source Overlapping taxpayers not adjusted in this period tend to yield an upward bias in estimating

the top income shares whereas the absence of financial global income tax leads to a downward bias

No additional adjustment is needed for the period of 1933-40 except for the adjustments made in

A32 We also estimate the top income shares based only on the global income tax statistics which

are available since 1976 Although the top income shares estimated this way has a shortcoming for its

narrow coverage of taxpayers compared with those estimated after combining two kinds of income tax

statistics they allow us to estimate the continuous series in the top income shares over 1976-2010

without missing periods

The estimates of the threshold income and the average income for the top percentiles are presented

in Tables A2 and A3 They are converted into real terms at constant 2010 prices by using consumer

price index The estimates of top income shares are presented in Table A4

A4 Top Income Composition

9

The income tax statistics before liberation provide the amount of income by sources without

dividing the taxpayers into separate income brackets Therefore the reported figures under the title of

the top 1 income composition in Table A5 for 1933-42 are not exactly those for top 1 The size of

top income groups varies from the top 14 in 1933 to the top 48 in 1942 We cannot compute the

top income composition between 1942 and 2006 since the income tax statistics do not provide

relevant information for computing the top income composition We obtain income composition for

the top 10 1 01 and 005 for the period of 2007-10 by combining the statistics of global

income tax and wage income tax

The top income composition is presented in Table A5 by income sources such as wage

income(wages salaries bonuses and pension) business income(unincorporated business profits farm

income and self-employment income) rents (rents from farmland and real estate) interest and

dividends After liberation rents from farmland disappeared due to the land reform the rents from real

estate were then included as business income

B Top Wage Income Shares

B1 Wage Income Taxation Data

We cannot estimate the top wage income shares before liberation because the income tax statistics

during this period do not provide data by sources of income After liberation income taxes were

separately withheld at source The Kuksae Tonggae Yonbo [Statistical Yearbook of National Tax]

(Semu Tonggae Yonbo [Statistical Yearbook of Tax Affairs] before 1965) provides the data on the

number of taxpayers the amount of income tax paid and tax rates by income brackets back to the

year 1957 As aforementioned the data source does not provide statistics on separate tax withheld at

source such as wage income tax for the years 1976-1994 Although the data on wage income tax for

1973-85 can be obtained from an internal source they are missing for the years 1986-94

B2 Total Wage Denominator

We need to define control totals for total wage earners and total wage income in order to estimate

the top wage income shares The number of total wage earners changes depending on the sources of

data due to the different coverage of workers The total number of employment in the Kyungje

Hwaldong Ingu Yonbo [Annual Survey on Economically Active Population(ASEAP)] published by

Korea Statistical Office is found to be considerably lower than the number of employment from

income tax statistics in recent years which provide the comprehensive information on wage income

earners including taxpayers workers with wage level below the exemption point and daily workers

10

The reason is that among the workers counted in income tax statistics there are some who are not

classified as employed in the ASEAP It is due to the difference in detecting the status of employment

between the two data sources10

Here we define the control total for wage income earners as the total

number of employment in the ASEAP which includes regular temporary and daily workers The

ASEAP provides data with consistent coverage back to the year 1963 Unfortunately the income tax

statistics does not report information on daily workers before 2008

The total amount of wage income cannot be obtained from income tax statistics and thus computed

from National Accounts Wages and salaries in the table of income account by institutional sectors of

National Accounts net of employerrsquos social contribution are the most comprehensive however they

include earnings of workers who are not classified as employed in the ASEAP The wage income of

this group is estimated to account for 67 of wage and salaries in National Accounts in 200911

Because we do not have relevant data to compute the figure for other years we deflate the wage and

salaries of National accounts for other years by the same rate of 67

The amount of wage and salaries is available in National Accounts since 1975 For earlier years we

extrapolated our estimate in 1975 by using the growth rate of the compensation of employees

presented in the table of distribution of national income in National Accounts published by the Bank

of Korea (1982) The amounts of total and average wage income are converted into those at constant

2010 prices by using the consumer price index The data are presented in Table B1

B3 Top Wage Numerator

The data on the top wage income are obtained by using the number of taxpayers and the amount of

income by income brackets provided by income tax statistics To estimate the income shares of top

percentiles we utilize the same method of Pareto interpolation as presented in A31 Due to the fact

that the information provided by the income tax statistics varies over years we made assumptions to

compute the top wage income Because we already explained the data on wage income for the periods

10

The ASEAP defines a worker as employed if he or she works more than one hour for pay during a surveyed

week which is much shorter than the time span for income tax statistics which detect the employment based

on the record of pay during a year

11 The income tax statistics in 2009 allows us to estimate the proportion of income earned by daily workers who

are not classified as employed in the ASEAP The income level of this group of workers is very low By

assuming that workers with a lower level of wage income in the income tax statistics tend to be classified as

unemployed we compute the amount of wage income accruing to the workers who should not be classified as

employed so that the number of employment in the income tax statistics may equal the total employment in

the ASEAP This is estimated to be 67 of wage and salaries in National Accounts in 2009

11

of 1995-2010 and 1979-1985 in A34 we focus on the data of the earlier period here

The data on income tax for the period of 1973-78 are taken from Juyo Saemu Tonggae[Statistics on

Major Tax Affairs] an unpublished internal document reported in 1981 This source provides the

number of taxpayers and the amount of tax paid by income brackets without specifying the amount of

wage income It is similar to the situation of Case B data in A32 In A32 we estimate the average

income of an income bracket by estimating d when the average income is specified as L+(H-L)d

where L and H are the upper and lower thresholds respectively Because we know the total income

we assume that d is constant in all the income brackets and thus we can estimate d However we do

not have information on total wage income here Thus we assume that the average wage income is

15L for the highest income bracket and therefore compute the average wage income for other

income brackets by fixing d equal to 04 which is based on the estimate from the adjacent year when

the data are available to estimate d Finally we compute the total wage income by income brackets by

multiplying the number of taxpayers and the average wage income

The data for 1968-72 are taken from Kuksae Tonggae Yeonbo [Statistical Yearbook of National Tax]

which provides the tax rate the number of taxpayers the amount of income and tax paid by income

brackets The amount of income in 1970-72 can be used directly because it equals the total wage

income to workers However in 1969-68 we have data on the amount of net taxable income which

needs to be converted to the amount of wage income taxpayers earned Since the conversion rate

cannot be estimated based on the data for this period we use the conversion rate by income brackets

for 1970 instead The conversion rate in 1970 is the ratio of total wage income to net taxable income

which is estimated by using the tax rate and the amount of tax paid by income brackets

The Statistical Yearbook of National Tax in 1957-67 provides two kinds of tables on income tax

statistics One is the table which provides the tax rate the number of taxpayers and the amount of

income by income brackets The information from this table is adequate for our purpose yet income

bracket is too coarse to be used with a small number of brackets The other table divides income

groups into finer brackets but provides only the number of taxpayers It is similar to Case B data in

A32 Thus we apply the same method as used for Case B data to the latter table and estimate the

amount of income by income brackets We also use the conversion rate for 1970 to convert the amount

of net taxable income into total wage income for this period because the table provides the amount of

net taxable income only

The threshold income and the average income for top income groups are presented in Tables B2 and

B3 They are also converted to constant 2010 prices by using the consumer price index Top income

shares are presented in Table B4 Although wage income tax statistics go back to the year 1957 we

can estimate the top income shares since 1963 because the ASEAP is available since 1963

B4 Marginal Tax Rates for Top Wage Income Earners

12

The marginal tax rates(MTRs) at the wage income threshold for the top wage income groups such

as the top 10 1 01 and 001 are estimated by using the method of Moriguchi and Saez (2008

Appendix C3) We assume that a taxpayer at each threshold income has only wage income and forms

a household with a non-working spouse and two dependent children We compute the net taxable

income by subtracting exemptions and deductions based on the income tax law in the corresponding

years from the threshold income and use the tax schedule to obtain the MTRs The estimates of MTRs

are presented in Table B5

By using the MTR at each threshold income we can obtain the MTR for the average taxpayer of

each top income group To obtain the MTR of the average taxpayer in the top 01 group we take the

weighted average of the average taxpayers of the top 001 and the top 01-001

ltInsert Table A1 ~ Table A5gt

ltInsert Table B1 ~ Table B5gt

ltInsert Figure A1gt

13

Table A1 Adult Population Number of Taxpayers Income and CPI

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) Total income and average income are at constant 2010 prices

Total adult

population(a

ge 20 and

over)

Toal incomeAverage

incomeCPI

(thousands)Global

income tax

Wage

income tax

Global

income tax

Wage

income tax(billion won)

(thousand

won)(2010=100)

A B C BA CA D DA E

1933 11094 154 14 14107 1272 00000103

1934 11262 173 15 14280 1268 00000114

1935 11432 193 17 16170 1414 00000122

1936 11520 198 17 16051 1393 00000129

1937 11609 237 20 19104 1646 00000140

1938 11699 269 23 18743 1602 00000153

1939 11789 276 23 16491 1399 00000196

1940 11880 362 31 19782 1665 00000205

1941 11992 534 45 00000213

1942 12105 576 48 00000232

1976 17959 402 22 83236 4635 126

1977 18592 443 24 94564 5086 139

1978 19249 475 25 111224 5778 159

1979 19941 551 4889 28 245 119086 5972 189

1980 20653 589 5005 29 242 107503 5205 243

1981 21386 612 5888 29 275 111687 5222 295

1982 22109 714 6041 32 273 120347 5443 316

1983 22805 682 6595 30 289 131324 5759 326

1984 23475 748 7071 32 301 148740 6336 334

1985 24093 762 7124 32 296 161995 6724 342

1986 24702 855 35 185049 7491 352

1987 25325 662 26 209937 8290 362

1988 25962 704 27 233492 8993 388

1989 26637 637 24 256211 9618 410

1990 27454 740 27 283125 10313 445

1991 28140 828 29 318729 11327 487

1992 28818 934 32 344085 11940 517

1993 29464 1129 38 368007 12490 542

1994 30078 1256 42 404667 13454 576

1995 30659 1338 7198 44 235 447923 14610 602

1996 31168 1216 6958 39 223 486670 15614 632

1997 31689 1254 6944 40 219 498359 15727 660

1998 32134 1166 6269 36 195 477469 14859 709

1999 32645 1267 5520 39 169 487741 14941 715

2000 33738 1529 5934 45 176 512345 15186 731

2001 34401 1669 6447 49 187 519834 15111 761

2002 35021 1842 6188 53 177 534899 15274 782

2003 35598 1905 6258 54 176 543903 15279 809

2004 36072 1943 6268 54 174 559652 15515 838

2005 36437 2279 6107 63 168 579632 15908 861

2006 36961 2736 6621 74 179 601400 16271 881

2007 37425 3074 7749 82 207 619847 16562 903

2008 37971 3584 7981 94 210 616895 16247 945

2009 38440 3571 8541 93 222 617346 16060 971

2010 38946 3785 9244 97 237 638059 16383 1000

Number of taxpayers

(thousands)

Taxpayeradult

population ()

14

Table A2 Threshold Income of Top Income Groups

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1933 185136 74267 46849 16099 10574

1934 204486 74608 47750 15359 9576

1935 203989 75431 48587 15589 9686

1936 186339 71454 45799 14952 9290

1937 230471 89483 54298 16233 10076

1938 223658 84185 52474 16527 10425

1939 204640 71145 46085 13768 8762 2902

1940 244524 83155 54223 16849 10231 3383

1979 134528 76165 59973 32722 25451 12746 8620

1980 131681 71280 49722 30250 23515 12118 7681

1981 129168 69434 53369 28930 22590 11868 8458

1982 135663 70123 54625 31498 24662 13301 8728

1983 148668 80784 62378 34124 26454 14289 9013

1984 164008 83902 65254 35865 28537 14661 9276

1985 176154 83921 64847 36524 28729 15995 10274

1995 491648 203713 145270 78818 59355 37894 27176

1996 537942 235608 167108 87999 65729 45555 38402

1997 565959 246090 176106 92871 70157 46914 39543

1998 448465 192108 138262 78374 59922 42164 35935

1999 486342 224510 163549 89336 67751 44563 37462

2000 567539 228883 179544 100104 76304 48019 39997

2001 638609 255093 190016 103341 78355 48281 39660

2002 690605 274862 208094 96713 86720 50171 40455

2003 715838 282083 211466 97854 88245 50879 40844

2004 798205 307253 206042 114137 93132 53643 37672

2005 856008 321897 216150 110785 88853 49590 34004

2006 948605 361709 246695 123879 99602 62413 41989

2007 1070223 398680 268306 125248 96463 58170 38765

2008 1051085 399573 270898 125218 97522 57701 37631

2009 1022569 397032 270642 124348 96264 56430 36053

2010 1104380 423467 283886 135564 104948 57063 36201

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

5

household member by the share of each member in the total household income Due to this feature of

the tax system at that time the income tax statistics of this period provide two kinds of tabulations

One tabulation (Case A data) provides the number of taxpayers defined as household and the amount

of net taxable income by brackets of the net taxable income The other tabulation (Case B data)

provides the number of taxpayers defined as individual by tax-paid brackets without any information

on income

To adjust the data for our purpose first we compute the amount of income by adding deductions to

the net taxable income The deductions during this period consisted of deductions for wage income

dependent family and insurance the deduction rate was scheduled to rise with an income decrease

We also make adjustment for the deduction for dividends the tax on which was levied after deducting

40 of dividends The deduction rate of dividends is thought to increase as the amount of dividends

increases unlike the deduction for wage income Because the data do not provide the deductions by

income brackets we apply the ratio of total deductions to the total net taxable income in order to

obtain the total income regardless of income bracket4

Second we should make an adjustment so that the tabulation in terms of household unit may be

converted to the one in terms of an individual unit Moriguchi and Saez (2008) made an adjustment in

the Case A data for the pre-war period of Japan by substituting household income for household

headrsquos income They considered that this adjustment does not make much difference because the

income of household heads accounts for more than 95 of the household income However it may

lead to an upward or downward bias in the estimation depending on the income groups Therefore we

compare the estimates from Case A data and Case B data By using Case B data with tax-paid brackets

we can compute the net taxable income corresponding to tax-paid in Case B data because we have the

corresponding tax rates for all the brackets of the net taxable income It allows us to compute the

number of taxpayers by brackets of net taxable income in terms of individual household members

from Case B data However the Case B data do not provide the amount of net taxable income by

brackets Therefore we assume that the average net taxable income for each bracket equals L+(H-

L)d where L and H are the lower and upper thresholds of the bracket5 Although d may be different

among brackets it is assumed that d is constant in order to compute d based on the total amount of net

taxable income from Case A data6 Once we compute d we obtain the amount of income by income

4 The ratios for wage income and deductions are 69-99 and 09-22 respectively

5 The coefficient d locates the average in between L and H For instance if d equals 04 the average is greater than L

by 40 of difference between H and L For the brackets of top incomes the number of taxpayers tends to fall as the

income increases Thus the average income of the bracket will be less than the midpoint which implies that d is

between 0 and 05

6 When there is only one taxpayer in a bracket usually observed in the highest income bracket we can use the amount

of income directly from Case A data Although the assumption of constant d is restrictive it will not make a

6

brackets

Comparing the estimates of top income shares based on the two methods mentioned above we find

that the estimate of the top 001 income shares based on Case A data is slightly greater than that

based on the Case B data whereas it is the other way round for top 1 income shares However there

is not much difference between the top 01 and 05 income shares It is due to two biasing factors

which work in opposite direction when we estimate the top income shares based on Case A data by

substituting household income for household headrsquos income The first factor causes an upward bias

since we overestimate household head income by including the incomes of other household members

in household head income The second factor gives rise to a downward bias as we enlarge the top

income group to lower income levels due to the omission of high-income members other than

household heads in Case B data In the estimation of the top 001 income shares the first factor

dominates the second factor and vice versa in the estimation of the top 1 income shares7

In this paper we use Case B data based on the individual unit in order to make the top income

shares series in the colonial period consistent with those after liberation

A33 Combining Global Income Tax Statistics and Wage Income Tax Statistics

Due to the extensive withholding system a small portion of taxpayers are required to file the global

income tax returns as Table A1 shows In particular taxpayers with wage income do not have to file

global income tax returns if the amount of income from other sources does not exceed a certain level

and the wage income tax is withheld at source in this case Therefore we complement global income

tax statistics with wage income tax statistics in order to make up for a large number of wage income

earners missing in the global income tax statistics Because many taxpayers who file global income

tax returns are also counted in wage income tax statistics we have to remove those overlapping

taxpayers when we combine the two income tax statistics

Global income tax statistics provide the tabulation of number of taxpayers and the amount of

income by income sources and by brackets of total income The wage income in this tabulation is the

double-counted amount of income when we combine the statistics To subtract this part of the income

we have to make the income brackets of the two income tax statistics correspond each other Faced

with a similar problem Moriguchi and Saez (2008 Appendix A31) introduced an assumption that

significant error because the total amount of net taxable income is obtained from actual data

7 Moriguchi and Saez (2008) used the data similar to Case A data when they estimated the top income shares in Japan

for the pre-war period In this case the estimate of the top 1 income shares using the data based on the household

unit has a significant downward bias compared with the estimate based on an individual unit The bias becomes

larger in the estimation of the top 5 income shares

7

those with higher total income tend to have higher wage income That is they assumed that the ratios

of wage income to total income are constant for each bracket8 Then they computed the ratios by

brackets of total income and converted the brackets of total income to those of wage income by

multiplying the thresholds of total income by the ratios This method just shifts the thresholds with the

number of taxpayers and the amount of income unchanged

Then we remove the double-counted part by subtracting the number of taxpayers and the amount of

wage income from the global income tax We add up the global income tax statistics and the wage

income tax statistics net of the double-counted part To remove the overlapping part and to add up the

two income statistics we also have to make different income brackets of the two statistics correspond

to each other For this we have to split the brackets of one tax statistics further with new thresholds

set by using the other tax statistics For this we use the Pareto interpolation method9

A34 Additional Adjustments Made by Periods

To overcome the limitations of data we made additional assumptions if allowed The data for the

period of 2005-2010 are sufficient enough to estimate the top income shares without any adjustment

However the data for 1995-2004 are not complete as those for 2005-2010 The tabulations of global

income tax for 1995-2004 provide the amount of income by brackets of net taxable income rather than

total income They should be converted into the amount of total income by income brackets We

8 This assumption of Moriguchi and Saez (2008) may not reflect reality if the distribution of income by sources varies

much among individual taxpayers Thus we try to estimate the top income shares by making different assumptions

on the distribution However the estimates are not so much different from 119 the estimate based on the method

of Saez and Moriguchi (2008) Thus we adopt the method of Saez and Moriguchi (2008) which allows us to

compare our estimate of top income shares in Korea with that in Japan

9 This method is different from the Pareto interpolation explained in A31 which does not use the data on the upper

thresholds The Pareto interpolation in A31 uses only the lower thresholds and the number of taxpayers and their

income above the lower thresholds This method which considers the income bracket as an open upper interval is

suitable when we estimate the top fractiles income shares however it is not proper when we create additional

brackets within an income bracket by a new threshold Therefore we use an interpolation method which uses both

the upper and lower thresholds of an income bracket First to interpolate the number of taxpayers we use the

equation H(yi+1)H(yi)=(yiyi+1)α induced from the Pareto cumulative distribution function where yi and yi+1 are the

lower and upper thresholds of the corresponding income bracket respectively and H is the share of taxpayers with

income higher than the threshold income y From the equation we can obtain α the Pareto coefficient of the

income bracket which is different from a in the equation of A31 If we substitute yc a new threshold income for yi

in the above equation we obtain the number of taxpayer in a corresponding new income bracket Similarly we can

interpolate the amount of income by using the equation G(yi+1)G(yi)=(yiyi+1)α-1

where G is the share of income

above the threshold income y

8

compute the amount of deductions and exemptions (the difference between income and net taxable

income) by using the data on the tax rate and the tax paid by brackets of net taxable income in income

tax statistics and obtain the data by income brackets The tabulations of wage income tax also provide

the amount of net taxable income by brackets We also need to convert the net taxable income into

total income by adding exemptions and deductions to the net taxable income However the data

source just provides the total amount of wage income without income brackets Thus we compute the

ratios of wage income to net taxable wage income by income brackets from the data of year 2005 and

apply the ratios to other years in order to convert the net taxable income into total wage income

Information needed to compute the double-counted amount of income when we combine the global

income tax and wage income tax in A33 is not available before 2005 Thus from the data for the year

2006 we compute the ratios of the double-counted taxpayers to total taxpayers and their wage income

to total wage income respectively We use the ratios for the period of 1995-2005 in order to remove

the double-counted parts by income brackets

The data for 1979-85 are similar to those for 1995-2004 as mentioned above We do not have to

make adjustments for wage income since we can obtain the amount of wage income by income

brackets for this period However we do not make an adjustment for the overlapping parts for this

period when we combine the global income statistics and wage income statistics First of all the

relevant information is not available for this period Second this period is far too old to use the ratios

computed from the data of year 2006 Third during this period only 3 of taxpayers filed global

income tax returns Thus there were less overlapping taxpayers during this period compared with the

more recent years During this period those who earned a large amount of financial income were

exempt from filing global income tax returns as long as the financial income was their only income

source Overlapping taxpayers not adjusted in this period tend to yield an upward bias in estimating

the top income shares whereas the absence of financial global income tax leads to a downward bias

No additional adjustment is needed for the period of 1933-40 except for the adjustments made in

A32 We also estimate the top income shares based only on the global income tax statistics which

are available since 1976 Although the top income shares estimated this way has a shortcoming for its

narrow coverage of taxpayers compared with those estimated after combining two kinds of income tax

statistics they allow us to estimate the continuous series in the top income shares over 1976-2010

without missing periods

The estimates of the threshold income and the average income for the top percentiles are presented

in Tables A2 and A3 They are converted into real terms at constant 2010 prices by using consumer

price index The estimates of top income shares are presented in Table A4

A4 Top Income Composition

9

The income tax statistics before liberation provide the amount of income by sources without

dividing the taxpayers into separate income brackets Therefore the reported figures under the title of

the top 1 income composition in Table A5 for 1933-42 are not exactly those for top 1 The size of

top income groups varies from the top 14 in 1933 to the top 48 in 1942 We cannot compute the

top income composition between 1942 and 2006 since the income tax statistics do not provide

relevant information for computing the top income composition We obtain income composition for

the top 10 1 01 and 005 for the period of 2007-10 by combining the statistics of global

income tax and wage income tax

The top income composition is presented in Table A5 by income sources such as wage

income(wages salaries bonuses and pension) business income(unincorporated business profits farm

income and self-employment income) rents (rents from farmland and real estate) interest and

dividends After liberation rents from farmland disappeared due to the land reform the rents from real

estate were then included as business income

B Top Wage Income Shares

B1 Wage Income Taxation Data

We cannot estimate the top wage income shares before liberation because the income tax statistics

during this period do not provide data by sources of income After liberation income taxes were

separately withheld at source The Kuksae Tonggae Yonbo [Statistical Yearbook of National Tax]

(Semu Tonggae Yonbo [Statistical Yearbook of Tax Affairs] before 1965) provides the data on the

number of taxpayers the amount of income tax paid and tax rates by income brackets back to the

year 1957 As aforementioned the data source does not provide statistics on separate tax withheld at

source such as wage income tax for the years 1976-1994 Although the data on wage income tax for

1973-85 can be obtained from an internal source they are missing for the years 1986-94

B2 Total Wage Denominator

We need to define control totals for total wage earners and total wage income in order to estimate

the top wage income shares The number of total wage earners changes depending on the sources of

data due to the different coverage of workers The total number of employment in the Kyungje

Hwaldong Ingu Yonbo [Annual Survey on Economically Active Population(ASEAP)] published by

Korea Statistical Office is found to be considerably lower than the number of employment from

income tax statistics in recent years which provide the comprehensive information on wage income

earners including taxpayers workers with wage level below the exemption point and daily workers

10

The reason is that among the workers counted in income tax statistics there are some who are not

classified as employed in the ASEAP It is due to the difference in detecting the status of employment

between the two data sources10

Here we define the control total for wage income earners as the total

number of employment in the ASEAP which includes regular temporary and daily workers The

ASEAP provides data with consistent coverage back to the year 1963 Unfortunately the income tax

statistics does not report information on daily workers before 2008

The total amount of wage income cannot be obtained from income tax statistics and thus computed

from National Accounts Wages and salaries in the table of income account by institutional sectors of

National Accounts net of employerrsquos social contribution are the most comprehensive however they

include earnings of workers who are not classified as employed in the ASEAP The wage income of

this group is estimated to account for 67 of wage and salaries in National Accounts in 200911

Because we do not have relevant data to compute the figure for other years we deflate the wage and

salaries of National accounts for other years by the same rate of 67

The amount of wage and salaries is available in National Accounts since 1975 For earlier years we

extrapolated our estimate in 1975 by using the growth rate of the compensation of employees

presented in the table of distribution of national income in National Accounts published by the Bank

of Korea (1982) The amounts of total and average wage income are converted into those at constant

2010 prices by using the consumer price index The data are presented in Table B1

B3 Top Wage Numerator

The data on the top wage income are obtained by using the number of taxpayers and the amount of

income by income brackets provided by income tax statistics To estimate the income shares of top

percentiles we utilize the same method of Pareto interpolation as presented in A31 Due to the fact

that the information provided by the income tax statistics varies over years we made assumptions to

compute the top wage income Because we already explained the data on wage income for the periods

10

The ASEAP defines a worker as employed if he or she works more than one hour for pay during a surveyed

week which is much shorter than the time span for income tax statistics which detect the employment based

on the record of pay during a year

11 The income tax statistics in 2009 allows us to estimate the proportion of income earned by daily workers who

are not classified as employed in the ASEAP The income level of this group of workers is very low By

assuming that workers with a lower level of wage income in the income tax statistics tend to be classified as

unemployed we compute the amount of wage income accruing to the workers who should not be classified as

employed so that the number of employment in the income tax statistics may equal the total employment in

the ASEAP This is estimated to be 67 of wage and salaries in National Accounts in 2009

11

of 1995-2010 and 1979-1985 in A34 we focus on the data of the earlier period here

The data on income tax for the period of 1973-78 are taken from Juyo Saemu Tonggae[Statistics on

Major Tax Affairs] an unpublished internal document reported in 1981 This source provides the

number of taxpayers and the amount of tax paid by income brackets without specifying the amount of

wage income It is similar to the situation of Case B data in A32 In A32 we estimate the average

income of an income bracket by estimating d when the average income is specified as L+(H-L)d

where L and H are the upper and lower thresholds respectively Because we know the total income

we assume that d is constant in all the income brackets and thus we can estimate d However we do

not have information on total wage income here Thus we assume that the average wage income is

15L for the highest income bracket and therefore compute the average wage income for other

income brackets by fixing d equal to 04 which is based on the estimate from the adjacent year when

the data are available to estimate d Finally we compute the total wage income by income brackets by

multiplying the number of taxpayers and the average wage income

The data for 1968-72 are taken from Kuksae Tonggae Yeonbo [Statistical Yearbook of National Tax]

which provides the tax rate the number of taxpayers the amount of income and tax paid by income

brackets The amount of income in 1970-72 can be used directly because it equals the total wage

income to workers However in 1969-68 we have data on the amount of net taxable income which

needs to be converted to the amount of wage income taxpayers earned Since the conversion rate

cannot be estimated based on the data for this period we use the conversion rate by income brackets

for 1970 instead The conversion rate in 1970 is the ratio of total wage income to net taxable income

which is estimated by using the tax rate and the amount of tax paid by income brackets

The Statistical Yearbook of National Tax in 1957-67 provides two kinds of tables on income tax

statistics One is the table which provides the tax rate the number of taxpayers and the amount of

income by income brackets The information from this table is adequate for our purpose yet income

bracket is too coarse to be used with a small number of brackets The other table divides income

groups into finer brackets but provides only the number of taxpayers It is similar to Case B data in

A32 Thus we apply the same method as used for Case B data to the latter table and estimate the

amount of income by income brackets We also use the conversion rate for 1970 to convert the amount

of net taxable income into total wage income for this period because the table provides the amount of

net taxable income only

The threshold income and the average income for top income groups are presented in Tables B2 and

B3 They are also converted to constant 2010 prices by using the consumer price index Top income

shares are presented in Table B4 Although wage income tax statistics go back to the year 1957 we

can estimate the top income shares since 1963 because the ASEAP is available since 1963

B4 Marginal Tax Rates for Top Wage Income Earners

12

The marginal tax rates(MTRs) at the wage income threshold for the top wage income groups such

as the top 10 1 01 and 001 are estimated by using the method of Moriguchi and Saez (2008

Appendix C3) We assume that a taxpayer at each threshold income has only wage income and forms

a household with a non-working spouse and two dependent children We compute the net taxable

income by subtracting exemptions and deductions based on the income tax law in the corresponding

years from the threshold income and use the tax schedule to obtain the MTRs The estimates of MTRs

are presented in Table B5

By using the MTR at each threshold income we can obtain the MTR for the average taxpayer of

each top income group To obtain the MTR of the average taxpayer in the top 01 group we take the

weighted average of the average taxpayers of the top 001 and the top 01-001

ltInsert Table A1 ~ Table A5gt

ltInsert Table B1 ~ Table B5gt

ltInsert Figure A1gt

13

Table A1 Adult Population Number of Taxpayers Income and CPI

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) Total income and average income are at constant 2010 prices

Total adult

population(a

ge 20 and

over)

Toal incomeAverage

incomeCPI

(thousands)Global

income tax

Wage

income tax

Global

income tax

Wage

income tax(billion won)

(thousand

won)(2010=100)

A B C BA CA D DA E

1933 11094 154 14 14107 1272 00000103

1934 11262 173 15 14280 1268 00000114

1935 11432 193 17 16170 1414 00000122

1936 11520 198 17 16051 1393 00000129

1937 11609 237 20 19104 1646 00000140

1938 11699 269 23 18743 1602 00000153

1939 11789 276 23 16491 1399 00000196

1940 11880 362 31 19782 1665 00000205

1941 11992 534 45 00000213

1942 12105 576 48 00000232

1976 17959 402 22 83236 4635 126

1977 18592 443 24 94564 5086 139

1978 19249 475 25 111224 5778 159

1979 19941 551 4889 28 245 119086 5972 189

1980 20653 589 5005 29 242 107503 5205 243

1981 21386 612 5888 29 275 111687 5222 295

1982 22109 714 6041 32 273 120347 5443 316

1983 22805 682 6595 30 289 131324 5759 326

1984 23475 748 7071 32 301 148740 6336 334

1985 24093 762 7124 32 296 161995 6724 342

1986 24702 855 35 185049 7491 352

1987 25325 662 26 209937 8290 362

1988 25962 704 27 233492 8993 388

1989 26637 637 24 256211 9618 410

1990 27454 740 27 283125 10313 445

1991 28140 828 29 318729 11327 487

1992 28818 934 32 344085 11940 517

1993 29464 1129 38 368007 12490 542

1994 30078 1256 42 404667 13454 576

1995 30659 1338 7198 44 235 447923 14610 602

1996 31168 1216 6958 39 223 486670 15614 632

1997 31689 1254 6944 40 219 498359 15727 660

1998 32134 1166 6269 36 195 477469 14859 709

1999 32645 1267 5520 39 169 487741 14941 715

2000 33738 1529 5934 45 176 512345 15186 731

2001 34401 1669 6447 49 187 519834 15111 761

2002 35021 1842 6188 53 177 534899 15274 782

2003 35598 1905 6258 54 176 543903 15279 809

2004 36072 1943 6268 54 174 559652 15515 838

2005 36437 2279 6107 63 168 579632 15908 861

2006 36961 2736 6621 74 179 601400 16271 881

2007 37425 3074 7749 82 207 619847 16562 903

2008 37971 3584 7981 94 210 616895 16247 945

2009 38440 3571 8541 93 222 617346 16060 971

2010 38946 3785 9244 97 237 638059 16383 1000

Number of taxpayers

(thousands)

Taxpayeradult

population ()

14

Table A2 Threshold Income of Top Income Groups

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1933 185136 74267 46849 16099 10574

1934 204486 74608 47750 15359 9576

1935 203989 75431 48587 15589 9686

1936 186339 71454 45799 14952 9290

1937 230471 89483 54298 16233 10076

1938 223658 84185 52474 16527 10425

1939 204640 71145 46085 13768 8762 2902

1940 244524 83155 54223 16849 10231 3383

1979 134528 76165 59973 32722 25451 12746 8620

1980 131681 71280 49722 30250 23515 12118 7681

1981 129168 69434 53369 28930 22590 11868 8458

1982 135663 70123 54625 31498 24662 13301 8728

1983 148668 80784 62378 34124 26454 14289 9013

1984 164008 83902 65254 35865 28537 14661 9276

1985 176154 83921 64847 36524 28729 15995 10274

1995 491648 203713 145270 78818 59355 37894 27176

1996 537942 235608 167108 87999 65729 45555 38402

1997 565959 246090 176106 92871 70157 46914 39543

1998 448465 192108 138262 78374 59922 42164 35935

1999 486342 224510 163549 89336 67751 44563 37462

2000 567539 228883 179544 100104 76304 48019 39997

2001 638609 255093 190016 103341 78355 48281 39660

2002 690605 274862 208094 96713 86720 50171 40455

2003 715838 282083 211466 97854 88245 50879 40844

2004 798205 307253 206042 114137 93132 53643 37672

2005 856008 321897 216150 110785 88853 49590 34004

2006 948605 361709 246695 123879 99602 62413 41989

2007 1070223 398680 268306 125248 96463 58170 38765

2008 1051085 399573 270898 125218 97522 57701 37631

2009 1022569 397032 270642 124348 96264 56430 36053

2010 1104380 423467 283886 135564 104948 57063 36201

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

6

brackets

Comparing the estimates of top income shares based on the two methods mentioned above we find

that the estimate of the top 001 income shares based on Case A data is slightly greater than that

based on the Case B data whereas it is the other way round for top 1 income shares However there

is not much difference between the top 01 and 05 income shares It is due to two biasing factors

which work in opposite direction when we estimate the top income shares based on Case A data by

substituting household income for household headrsquos income The first factor causes an upward bias

since we overestimate household head income by including the incomes of other household members

in household head income The second factor gives rise to a downward bias as we enlarge the top

income group to lower income levels due to the omission of high-income members other than

household heads in Case B data In the estimation of the top 001 income shares the first factor

dominates the second factor and vice versa in the estimation of the top 1 income shares7

In this paper we use Case B data based on the individual unit in order to make the top income

shares series in the colonial period consistent with those after liberation

A33 Combining Global Income Tax Statistics and Wage Income Tax Statistics

Due to the extensive withholding system a small portion of taxpayers are required to file the global

income tax returns as Table A1 shows In particular taxpayers with wage income do not have to file

global income tax returns if the amount of income from other sources does not exceed a certain level

and the wage income tax is withheld at source in this case Therefore we complement global income

tax statistics with wage income tax statistics in order to make up for a large number of wage income

earners missing in the global income tax statistics Because many taxpayers who file global income

tax returns are also counted in wage income tax statistics we have to remove those overlapping

taxpayers when we combine the two income tax statistics

Global income tax statistics provide the tabulation of number of taxpayers and the amount of

income by income sources and by brackets of total income The wage income in this tabulation is the

double-counted amount of income when we combine the statistics To subtract this part of the income

we have to make the income brackets of the two income tax statistics correspond each other Faced

with a similar problem Moriguchi and Saez (2008 Appendix A31) introduced an assumption that

significant error because the total amount of net taxable income is obtained from actual data

7 Moriguchi and Saez (2008) used the data similar to Case A data when they estimated the top income shares in Japan

for the pre-war period In this case the estimate of the top 1 income shares using the data based on the household

unit has a significant downward bias compared with the estimate based on an individual unit The bias becomes

larger in the estimation of the top 5 income shares

7

those with higher total income tend to have higher wage income That is they assumed that the ratios

of wage income to total income are constant for each bracket8 Then they computed the ratios by

brackets of total income and converted the brackets of total income to those of wage income by

multiplying the thresholds of total income by the ratios This method just shifts the thresholds with the

number of taxpayers and the amount of income unchanged

Then we remove the double-counted part by subtracting the number of taxpayers and the amount of

wage income from the global income tax We add up the global income tax statistics and the wage

income tax statistics net of the double-counted part To remove the overlapping part and to add up the

two income statistics we also have to make different income brackets of the two statistics correspond

to each other For this we have to split the brackets of one tax statistics further with new thresholds

set by using the other tax statistics For this we use the Pareto interpolation method9

A34 Additional Adjustments Made by Periods

To overcome the limitations of data we made additional assumptions if allowed The data for the

period of 2005-2010 are sufficient enough to estimate the top income shares without any adjustment

However the data for 1995-2004 are not complete as those for 2005-2010 The tabulations of global

income tax for 1995-2004 provide the amount of income by brackets of net taxable income rather than

total income They should be converted into the amount of total income by income brackets We

8 This assumption of Moriguchi and Saez (2008) may not reflect reality if the distribution of income by sources varies

much among individual taxpayers Thus we try to estimate the top income shares by making different assumptions

on the distribution However the estimates are not so much different from 119 the estimate based on the method

of Saez and Moriguchi (2008) Thus we adopt the method of Saez and Moriguchi (2008) which allows us to

compare our estimate of top income shares in Korea with that in Japan

9 This method is different from the Pareto interpolation explained in A31 which does not use the data on the upper

thresholds The Pareto interpolation in A31 uses only the lower thresholds and the number of taxpayers and their

income above the lower thresholds This method which considers the income bracket as an open upper interval is

suitable when we estimate the top fractiles income shares however it is not proper when we create additional

brackets within an income bracket by a new threshold Therefore we use an interpolation method which uses both

the upper and lower thresholds of an income bracket First to interpolate the number of taxpayers we use the

equation H(yi+1)H(yi)=(yiyi+1)α induced from the Pareto cumulative distribution function where yi and yi+1 are the

lower and upper thresholds of the corresponding income bracket respectively and H is the share of taxpayers with

income higher than the threshold income y From the equation we can obtain α the Pareto coefficient of the

income bracket which is different from a in the equation of A31 If we substitute yc a new threshold income for yi

in the above equation we obtain the number of taxpayer in a corresponding new income bracket Similarly we can

interpolate the amount of income by using the equation G(yi+1)G(yi)=(yiyi+1)α-1

where G is the share of income

above the threshold income y

8

compute the amount of deductions and exemptions (the difference between income and net taxable

income) by using the data on the tax rate and the tax paid by brackets of net taxable income in income

tax statistics and obtain the data by income brackets The tabulations of wage income tax also provide

the amount of net taxable income by brackets We also need to convert the net taxable income into

total income by adding exemptions and deductions to the net taxable income However the data

source just provides the total amount of wage income without income brackets Thus we compute the

ratios of wage income to net taxable wage income by income brackets from the data of year 2005 and

apply the ratios to other years in order to convert the net taxable income into total wage income

Information needed to compute the double-counted amount of income when we combine the global

income tax and wage income tax in A33 is not available before 2005 Thus from the data for the year

2006 we compute the ratios of the double-counted taxpayers to total taxpayers and their wage income

to total wage income respectively We use the ratios for the period of 1995-2005 in order to remove

the double-counted parts by income brackets

The data for 1979-85 are similar to those for 1995-2004 as mentioned above We do not have to

make adjustments for wage income since we can obtain the amount of wage income by income

brackets for this period However we do not make an adjustment for the overlapping parts for this

period when we combine the global income statistics and wage income statistics First of all the

relevant information is not available for this period Second this period is far too old to use the ratios

computed from the data of year 2006 Third during this period only 3 of taxpayers filed global

income tax returns Thus there were less overlapping taxpayers during this period compared with the

more recent years During this period those who earned a large amount of financial income were

exempt from filing global income tax returns as long as the financial income was their only income

source Overlapping taxpayers not adjusted in this period tend to yield an upward bias in estimating

the top income shares whereas the absence of financial global income tax leads to a downward bias

No additional adjustment is needed for the period of 1933-40 except for the adjustments made in

A32 We also estimate the top income shares based only on the global income tax statistics which

are available since 1976 Although the top income shares estimated this way has a shortcoming for its

narrow coverage of taxpayers compared with those estimated after combining two kinds of income tax

statistics they allow us to estimate the continuous series in the top income shares over 1976-2010

without missing periods

The estimates of the threshold income and the average income for the top percentiles are presented

in Tables A2 and A3 They are converted into real terms at constant 2010 prices by using consumer

price index The estimates of top income shares are presented in Table A4

A4 Top Income Composition

9

The income tax statistics before liberation provide the amount of income by sources without

dividing the taxpayers into separate income brackets Therefore the reported figures under the title of

the top 1 income composition in Table A5 for 1933-42 are not exactly those for top 1 The size of

top income groups varies from the top 14 in 1933 to the top 48 in 1942 We cannot compute the

top income composition between 1942 and 2006 since the income tax statistics do not provide

relevant information for computing the top income composition We obtain income composition for

the top 10 1 01 and 005 for the period of 2007-10 by combining the statistics of global

income tax and wage income tax

The top income composition is presented in Table A5 by income sources such as wage

income(wages salaries bonuses and pension) business income(unincorporated business profits farm

income and self-employment income) rents (rents from farmland and real estate) interest and

dividends After liberation rents from farmland disappeared due to the land reform the rents from real

estate were then included as business income

B Top Wage Income Shares

B1 Wage Income Taxation Data

We cannot estimate the top wage income shares before liberation because the income tax statistics

during this period do not provide data by sources of income After liberation income taxes were

separately withheld at source The Kuksae Tonggae Yonbo [Statistical Yearbook of National Tax]

(Semu Tonggae Yonbo [Statistical Yearbook of Tax Affairs] before 1965) provides the data on the

number of taxpayers the amount of income tax paid and tax rates by income brackets back to the

year 1957 As aforementioned the data source does not provide statistics on separate tax withheld at

source such as wage income tax for the years 1976-1994 Although the data on wage income tax for

1973-85 can be obtained from an internal source they are missing for the years 1986-94

B2 Total Wage Denominator

We need to define control totals for total wage earners and total wage income in order to estimate

the top wage income shares The number of total wage earners changes depending on the sources of

data due to the different coverage of workers The total number of employment in the Kyungje

Hwaldong Ingu Yonbo [Annual Survey on Economically Active Population(ASEAP)] published by

Korea Statistical Office is found to be considerably lower than the number of employment from

income tax statistics in recent years which provide the comprehensive information on wage income

earners including taxpayers workers with wage level below the exemption point and daily workers

10

The reason is that among the workers counted in income tax statistics there are some who are not

classified as employed in the ASEAP It is due to the difference in detecting the status of employment

between the two data sources10

Here we define the control total for wage income earners as the total

number of employment in the ASEAP which includes regular temporary and daily workers The

ASEAP provides data with consistent coverage back to the year 1963 Unfortunately the income tax

statistics does not report information on daily workers before 2008

The total amount of wage income cannot be obtained from income tax statistics and thus computed

from National Accounts Wages and salaries in the table of income account by institutional sectors of

National Accounts net of employerrsquos social contribution are the most comprehensive however they

include earnings of workers who are not classified as employed in the ASEAP The wage income of

this group is estimated to account for 67 of wage and salaries in National Accounts in 200911

Because we do not have relevant data to compute the figure for other years we deflate the wage and

salaries of National accounts for other years by the same rate of 67

The amount of wage and salaries is available in National Accounts since 1975 For earlier years we

extrapolated our estimate in 1975 by using the growth rate of the compensation of employees

presented in the table of distribution of national income in National Accounts published by the Bank

of Korea (1982) The amounts of total and average wage income are converted into those at constant

2010 prices by using the consumer price index The data are presented in Table B1

B3 Top Wage Numerator

The data on the top wage income are obtained by using the number of taxpayers and the amount of

income by income brackets provided by income tax statistics To estimate the income shares of top

percentiles we utilize the same method of Pareto interpolation as presented in A31 Due to the fact

that the information provided by the income tax statistics varies over years we made assumptions to

compute the top wage income Because we already explained the data on wage income for the periods

10

The ASEAP defines a worker as employed if he or she works more than one hour for pay during a surveyed

week which is much shorter than the time span for income tax statistics which detect the employment based

on the record of pay during a year

11 The income tax statistics in 2009 allows us to estimate the proportion of income earned by daily workers who

are not classified as employed in the ASEAP The income level of this group of workers is very low By

assuming that workers with a lower level of wage income in the income tax statistics tend to be classified as

unemployed we compute the amount of wage income accruing to the workers who should not be classified as

employed so that the number of employment in the income tax statistics may equal the total employment in

the ASEAP This is estimated to be 67 of wage and salaries in National Accounts in 2009

11

of 1995-2010 and 1979-1985 in A34 we focus on the data of the earlier period here

The data on income tax for the period of 1973-78 are taken from Juyo Saemu Tonggae[Statistics on

Major Tax Affairs] an unpublished internal document reported in 1981 This source provides the

number of taxpayers and the amount of tax paid by income brackets without specifying the amount of

wage income It is similar to the situation of Case B data in A32 In A32 we estimate the average

income of an income bracket by estimating d when the average income is specified as L+(H-L)d

where L and H are the upper and lower thresholds respectively Because we know the total income

we assume that d is constant in all the income brackets and thus we can estimate d However we do

not have information on total wage income here Thus we assume that the average wage income is

15L for the highest income bracket and therefore compute the average wage income for other

income brackets by fixing d equal to 04 which is based on the estimate from the adjacent year when

the data are available to estimate d Finally we compute the total wage income by income brackets by

multiplying the number of taxpayers and the average wage income

The data for 1968-72 are taken from Kuksae Tonggae Yeonbo [Statistical Yearbook of National Tax]

which provides the tax rate the number of taxpayers the amount of income and tax paid by income

brackets The amount of income in 1970-72 can be used directly because it equals the total wage

income to workers However in 1969-68 we have data on the amount of net taxable income which

needs to be converted to the amount of wage income taxpayers earned Since the conversion rate

cannot be estimated based on the data for this period we use the conversion rate by income brackets

for 1970 instead The conversion rate in 1970 is the ratio of total wage income to net taxable income

which is estimated by using the tax rate and the amount of tax paid by income brackets

The Statistical Yearbook of National Tax in 1957-67 provides two kinds of tables on income tax

statistics One is the table which provides the tax rate the number of taxpayers and the amount of

income by income brackets The information from this table is adequate for our purpose yet income

bracket is too coarse to be used with a small number of brackets The other table divides income

groups into finer brackets but provides only the number of taxpayers It is similar to Case B data in

A32 Thus we apply the same method as used for Case B data to the latter table and estimate the

amount of income by income brackets We also use the conversion rate for 1970 to convert the amount

of net taxable income into total wage income for this period because the table provides the amount of

net taxable income only

The threshold income and the average income for top income groups are presented in Tables B2 and

B3 They are also converted to constant 2010 prices by using the consumer price index Top income

shares are presented in Table B4 Although wage income tax statistics go back to the year 1957 we

can estimate the top income shares since 1963 because the ASEAP is available since 1963

B4 Marginal Tax Rates for Top Wage Income Earners

12

The marginal tax rates(MTRs) at the wage income threshold for the top wage income groups such

as the top 10 1 01 and 001 are estimated by using the method of Moriguchi and Saez (2008

Appendix C3) We assume that a taxpayer at each threshold income has only wage income and forms

a household with a non-working spouse and two dependent children We compute the net taxable

income by subtracting exemptions and deductions based on the income tax law in the corresponding

years from the threshold income and use the tax schedule to obtain the MTRs The estimates of MTRs

are presented in Table B5

By using the MTR at each threshold income we can obtain the MTR for the average taxpayer of

each top income group To obtain the MTR of the average taxpayer in the top 01 group we take the

weighted average of the average taxpayers of the top 001 and the top 01-001

ltInsert Table A1 ~ Table A5gt

ltInsert Table B1 ~ Table B5gt

ltInsert Figure A1gt

13

Table A1 Adult Population Number of Taxpayers Income and CPI

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) Total income and average income are at constant 2010 prices

Total adult

population(a

ge 20 and

over)

Toal incomeAverage

incomeCPI

(thousands)Global

income tax

Wage

income tax

Global

income tax

Wage

income tax(billion won)

(thousand

won)(2010=100)

A B C BA CA D DA E

1933 11094 154 14 14107 1272 00000103

1934 11262 173 15 14280 1268 00000114

1935 11432 193 17 16170 1414 00000122

1936 11520 198 17 16051 1393 00000129

1937 11609 237 20 19104 1646 00000140

1938 11699 269 23 18743 1602 00000153

1939 11789 276 23 16491 1399 00000196

1940 11880 362 31 19782 1665 00000205

1941 11992 534 45 00000213

1942 12105 576 48 00000232

1976 17959 402 22 83236 4635 126

1977 18592 443 24 94564 5086 139

1978 19249 475 25 111224 5778 159

1979 19941 551 4889 28 245 119086 5972 189

1980 20653 589 5005 29 242 107503 5205 243

1981 21386 612 5888 29 275 111687 5222 295

1982 22109 714 6041 32 273 120347 5443 316

1983 22805 682 6595 30 289 131324 5759 326

1984 23475 748 7071 32 301 148740 6336 334

1985 24093 762 7124 32 296 161995 6724 342

1986 24702 855 35 185049 7491 352

1987 25325 662 26 209937 8290 362

1988 25962 704 27 233492 8993 388

1989 26637 637 24 256211 9618 410

1990 27454 740 27 283125 10313 445

1991 28140 828 29 318729 11327 487

1992 28818 934 32 344085 11940 517

1993 29464 1129 38 368007 12490 542

1994 30078 1256 42 404667 13454 576

1995 30659 1338 7198 44 235 447923 14610 602

1996 31168 1216 6958 39 223 486670 15614 632

1997 31689 1254 6944 40 219 498359 15727 660

1998 32134 1166 6269 36 195 477469 14859 709

1999 32645 1267 5520 39 169 487741 14941 715

2000 33738 1529 5934 45 176 512345 15186 731

2001 34401 1669 6447 49 187 519834 15111 761

2002 35021 1842 6188 53 177 534899 15274 782

2003 35598 1905 6258 54 176 543903 15279 809

2004 36072 1943 6268 54 174 559652 15515 838

2005 36437 2279 6107 63 168 579632 15908 861

2006 36961 2736 6621 74 179 601400 16271 881

2007 37425 3074 7749 82 207 619847 16562 903

2008 37971 3584 7981 94 210 616895 16247 945

2009 38440 3571 8541 93 222 617346 16060 971

2010 38946 3785 9244 97 237 638059 16383 1000

Number of taxpayers

(thousands)

Taxpayeradult

population ()

14

Table A2 Threshold Income of Top Income Groups

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1933 185136 74267 46849 16099 10574

1934 204486 74608 47750 15359 9576

1935 203989 75431 48587 15589 9686

1936 186339 71454 45799 14952 9290

1937 230471 89483 54298 16233 10076

1938 223658 84185 52474 16527 10425

1939 204640 71145 46085 13768 8762 2902

1940 244524 83155 54223 16849 10231 3383

1979 134528 76165 59973 32722 25451 12746 8620

1980 131681 71280 49722 30250 23515 12118 7681

1981 129168 69434 53369 28930 22590 11868 8458

1982 135663 70123 54625 31498 24662 13301 8728

1983 148668 80784 62378 34124 26454 14289 9013

1984 164008 83902 65254 35865 28537 14661 9276

1985 176154 83921 64847 36524 28729 15995 10274

1995 491648 203713 145270 78818 59355 37894 27176

1996 537942 235608 167108 87999 65729 45555 38402

1997 565959 246090 176106 92871 70157 46914 39543

1998 448465 192108 138262 78374 59922 42164 35935

1999 486342 224510 163549 89336 67751 44563 37462

2000 567539 228883 179544 100104 76304 48019 39997

2001 638609 255093 190016 103341 78355 48281 39660

2002 690605 274862 208094 96713 86720 50171 40455

2003 715838 282083 211466 97854 88245 50879 40844

2004 798205 307253 206042 114137 93132 53643 37672

2005 856008 321897 216150 110785 88853 49590 34004

2006 948605 361709 246695 123879 99602 62413 41989

2007 1070223 398680 268306 125248 96463 58170 38765

2008 1051085 399573 270898 125218 97522 57701 37631

2009 1022569 397032 270642 124348 96264 56430 36053

2010 1104380 423467 283886 135564 104948 57063 36201

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

7

those with higher total income tend to have higher wage income That is they assumed that the ratios

of wage income to total income are constant for each bracket8 Then they computed the ratios by

brackets of total income and converted the brackets of total income to those of wage income by

multiplying the thresholds of total income by the ratios This method just shifts the thresholds with the

number of taxpayers and the amount of income unchanged

Then we remove the double-counted part by subtracting the number of taxpayers and the amount of

wage income from the global income tax We add up the global income tax statistics and the wage

income tax statistics net of the double-counted part To remove the overlapping part and to add up the

two income statistics we also have to make different income brackets of the two statistics correspond

to each other For this we have to split the brackets of one tax statistics further with new thresholds

set by using the other tax statistics For this we use the Pareto interpolation method9

A34 Additional Adjustments Made by Periods

To overcome the limitations of data we made additional assumptions if allowed The data for the

period of 2005-2010 are sufficient enough to estimate the top income shares without any adjustment

However the data for 1995-2004 are not complete as those for 2005-2010 The tabulations of global

income tax for 1995-2004 provide the amount of income by brackets of net taxable income rather than

total income They should be converted into the amount of total income by income brackets We

8 This assumption of Moriguchi and Saez (2008) may not reflect reality if the distribution of income by sources varies

much among individual taxpayers Thus we try to estimate the top income shares by making different assumptions

on the distribution However the estimates are not so much different from 119 the estimate based on the method

of Saez and Moriguchi (2008) Thus we adopt the method of Saez and Moriguchi (2008) which allows us to

compare our estimate of top income shares in Korea with that in Japan

9 This method is different from the Pareto interpolation explained in A31 which does not use the data on the upper

thresholds The Pareto interpolation in A31 uses only the lower thresholds and the number of taxpayers and their

income above the lower thresholds This method which considers the income bracket as an open upper interval is

suitable when we estimate the top fractiles income shares however it is not proper when we create additional

brackets within an income bracket by a new threshold Therefore we use an interpolation method which uses both

the upper and lower thresholds of an income bracket First to interpolate the number of taxpayers we use the

equation H(yi+1)H(yi)=(yiyi+1)α induced from the Pareto cumulative distribution function where yi and yi+1 are the

lower and upper thresholds of the corresponding income bracket respectively and H is the share of taxpayers with

income higher than the threshold income y From the equation we can obtain α the Pareto coefficient of the

income bracket which is different from a in the equation of A31 If we substitute yc a new threshold income for yi

in the above equation we obtain the number of taxpayer in a corresponding new income bracket Similarly we can

interpolate the amount of income by using the equation G(yi+1)G(yi)=(yiyi+1)α-1

where G is the share of income

above the threshold income y

8

compute the amount of deductions and exemptions (the difference between income and net taxable

income) by using the data on the tax rate and the tax paid by brackets of net taxable income in income

tax statistics and obtain the data by income brackets The tabulations of wage income tax also provide

the amount of net taxable income by brackets We also need to convert the net taxable income into

total income by adding exemptions and deductions to the net taxable income However the data

source just provides the total amount of wage income without income brackets Thus we compute the

ratios of wage income to net taxable wage income by income brackets from the data of year 2005 and

apply the ratios to other years in order to convert the net taxable income into total wage income

Information needed to compute the double-counted amount of income when we combine the global

income tax and wage income tax in A33 is not available before 2005 Thus from the data for the year

2006 we compute the ratios of the double-counted taxpayers to total taxpayers and their wage income

to total wage income respectively We use the ratios for the period of 1995-2005 in order to remove

the double-counted parts by income brackets

The data for 1979-85 are similar to those for 1995-2004 as mentioned above We do not have to

make adjustments for wage income since we can obtain the amount of wage income by income

brackets for this period However we do not make an adjustment for the overlapping parts for this

period when we combine the global income statistics and wage income statistics First of all the

relevant information is not available for this period Second this period is far too old to use the ratios

computed from the data of year 2006 Third during this period only 3 of taxpayers filed global

income tax returns Thus there were less overlapping taxpayers during this period compared with the

more recent years During this period those who earned a large amount of financial income were

exempt from filing global income tax returns as long as the financial income was their only income

source Overlapping taxpayers not adjusted in this period tend to yield an upward bias in estimating

the top income shares whereas the absence of financial global income tax leads to a downward bias

No additional adjustment is needed for the period of 1933-40 except for the adjustments made in

A32 We also estimate the top income shares based only on the global income tax statistics which

are available since 1976 Although the top income shares estimated this way has a shortcoming for its

narrow coverage of taxpayers compared with those estimated after combining two kinds of income tax

statistics they allow us to estimate the continuous series in the top income shares over 1976-2010

without missing periods

The estimates of the threshold income and the average income for the top percentiles are presented

in Tables A2 and A3 They are converted into real terms at constant 2010 prices by using consumer

price index The estimates of top income shares are presented in Table A4

A4 Top Income Composition

9

The income tax statistics before liberation provide the amount of income by sources without

dividing the taxpayers into separate income brackets Therefore the reported figures under the title of

the top 1 income composition in Table A5 for 1933-42 are not exactly those for top 1 The size of

top income groups varies from the top 14 in 1933 to the top 48 in 1942 We cannot compute the

top income composition between 1942 and 2006 since the income tax statistics do not provide

relevant information for computing the top income composition We obtain income composition for

the top 10 1 01 and 005 for the period of 2007-10 by combining the statistics of global

income tax and wage income tax

The top income composition is presented in Table A5 by income sources such as wage

income(wages salaries bonuses and pension) business income(unincorporated business profits farm

income and self-employment income) rents (rents from farmland and real estate) interest and

dividends After liberation rents from farmland disappeared due to the land reform the rents from real

estate were then included as business income

B Top Wage Income Shares

B1 Wage Income Taxation Data

We cannot estimate the top wage income shares before liberation because the income tax statistics

during this period do not provide data by sources of income After liberation income taxes were

separately withheld at source The Kuksae Tonggae Yonbo [Statistical Yearbook of National Tax]

(Semu Tonggae Yonbo [Statistical Yearbook of Tax Affairs] before 1965) provides the data on the

number of taxpayers the amount of income tax paid and tax rates by income brackets back to the

year 1957 As aforementioned the data source does not provide statistics on separate tax withheld at

source such as wage income tax for the years 1976-1994 Although the data on wage income tax for

1973-85 can be obtained from an internal source they are missing for the years 1986-94

B2 Total Wage Denominator

We need to define control totals for total wage earners and total wage income in order to estimate

the top wage income shares The number of total wage earners changes depending on the sources of

data due to the different coverage of workers The total number of employment in the Kyungje

Hwaldong Ingu Yonbo [Annual Survey on Economically Active Population(ASEAP)] published by

Korea Statistical Office is found to be considerably lower than the number of employment from

income tax statistics in recent years which provide the comprehensive information on wage income

earners including taxpayers workers with wage level below the exemption point and daily workers

10

The reason is that among the workers counted in income tax statistics there are some who are not

classified as employed in the ASEAP It is due to the difference in detecting the status of employment

between the two data sources10

Here we define the control total for wage income earners as the total

number of employment in the ASEAP which includes regular temporary and daily workers The

ASEAP provides data with consistent coverage back to the year 1963 Unfortunately the income tax

statistics does not report information on daily workers before 2008

The total amount of wage income cannot be obtained from income tax statistics and thus computed

from National Accounts Wages and salaries in the table of income account by institutional sectors of

National Accounts net of employerrsquos social contribution are the most comprehensive however they

include earnings of workers who are not classified as employed in the ASEAP The wage income of

this group is estimated to account for 67 of wage and salaries in National Accounts in 200911

Because we do not have relevant data to compute the figure for other years we deflate the wage and

salaries of National accounts for other years by the same rate of 67

The amount of wage and salaries is available in National Accounts since 1975 For earlier years we

extrapolated our estimate in 1975 by using the growth rate of the compensation of employees

presented in the table of distribution of national income in National Accounts published by the Bank

of Korea (1982) The amounts of total and average wage income are converted into those at constant

2010 prices by using the consumer price index The data are presented in Table B1

B3 Top Wage Numerator

The data on the top wage income are obtained by using the number of taxpayers and the amount of

income by income brackets provided by income tax statistics To estimate the income shares of top

percentiles we utilize the same method of Pareto interpolation as presented in A31 Due to the fact

that the information provided by the income tax statistics varies over years we made assumptions to

compute the top wage income Because we already explained the data on wage income for the periods

10

The ASEAP defines a worker as employed if he or she works more than one hour for pay during a surveyed

week which is much shorter than the time span for income tax statistics which detect the employment based

on the record of pay during a year

11 The income tax statistics in 2009 allows us to estimate the proportion of income earned by daily workers who

are not classified as employed in the ASEAP The income level of this group of workers is very low By

assuming that workers with a lower level of wage income in the income tax statistics tend to be classified as

unemployed we compute the amount of wage income accruing to the workers who should not be classified as

employed so that the number of employment in the income tax statistics may equal the total employment in

the ASEAP This is estimated to be 67 of wage and salaries in National Accounts in 2009

11

of 1995-2010 and 1979-1985 in A34 we focus on the data of the earlier period here

The data on income tax for the period of 1973-78 are taken from Juyo Saemu Tonggae[Statistics on

Major Tax Affairs] an unpublished internal document reported in 1981 This source provides the

number of taxpayers and the amount of tax paid by income brackets without specifying the amount of

wage income It is similar to the situation of Case B data in A32 In A32 we estimate the average

income of an income bracket by estimating d when the average income is specified as L+(H-L)d

where L and H are the upper and lower thresholds respectively Because we know the total income

we assume that d is constant in all the income brackets and thus we can estimate d However we do

not have information on total wage income here Thus we assume that the average wage income is

15L for the highest income bracket and therefore compute the average wage income for other

income brackets by fixing d equal to 04 which is based on the estimate from the adjacent year when

the data are available to estimate d Finally we compute the total wage income by income brackets by

multiplying the number of taxpayers and the average wage income

The data for 1968-72 are taken from Kuksae Tonggae Yeonbo [Statistical Yearbook of National Tax]

which provides the tax rate the number of taxpayers the amount of income and tax paid by income

brackets The amount of income in 1970-72 can be used directly because it equals the total wage

income to workers However in 1969-68 we have data on the amount of net taxable income which

needs to be converted to the amount of wage income taxpayers earned Since the conversion rate

cannot be estimated based on the data for this period we use the conversion rate by income brackets

for 1970 instead The conversion rate in 1970 is the ratio of total wage income to net taxable income

which is estimated by using the tax rate and the amount of tax paid by income brackets

The Statistical Yearbook of National Tax in 1957-67 provides two kinds of tables on income tax

statistics One is the table which provides the tax rate the number of taxpayers and the amount of

income by income brackets The information from this table is adequate for our purpose yet income

bracket is too coarse to be used with a small number of brackets The other table divides income

groups into finer brackets but provides only the number of taxpayers It is similar to Case B data in

A32 Thus we apply the same method as used for Case B data to the latter table and estimate the

amount of income by income brackets We also use the conversion rate for 1970 to convert the amount

of net taxable income into total wage income for this period because the table provides the amount of

net taxable income only

The threshold income and the average income for top income groups are presented in Tables B2 and

B3 They are also converted to constant 2010 prices by using the consumer price index Top income

shares are presented in Table B4 Although wage income tax statistics go back to the year 1957 we

can estimate the top income shares since 1963 because the ASEAP is available since 1963

B4 Marginal Tax Rates for Top Wage Income Earners

12

The marginal tax rates(MTRs) at the wage income threshold for the top wage income groups such

as the top 10 1 01 and 001 are estimated by using the method of Moriguchi and Saez (2008

Appendix C3) We assume that a taxpayer at each threshold income has only wage income and forms

a household with a non-working spouse and two dependent children We compute the net taxable

income by subtracting exemptions and deductions based on the income tax law in the corresponding

years from the threshold income and use the tax schedule to obtain the MTRs The estimates of MTRs

are presented in Table B5

By using the MTR at each threshold income we can obtain the MTR for the average taxpayer of

each top income group To obtain the MTR of the average taxpayer in the top 01 group we take the

weighted average of the average taxpayers of the top 001 and the top 01-001

ltInsert Table A1 ~ Table A5gt

ltInsert Table B1 ~ Table B5gt

ltInsert Figure A1gt

13

Table A1 Adult Population Number of Taxpayers Income and CPI

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) Total income and average income are at constant 2010 prices

Total adult

population(a

ge 20 and

over)

Toal incomeAverage

incomeCPI

(thousands)Global

income tax

Wage

income tax

Global

income tax

Wage

income tax(billion won)

(thousand

won)(2010=100)

A B C BA CA D DA E

1933 11094 154 14 14107 1272 00000103

1934 11262 173 15 14280 1268 00000114

1935 11432 193 17 16170 1414 00000122

1936 11520 198 17 16051 1393 00000129

1937 11609 237 20 19104 1646 00000140

1938 11699 269 23 18743 1602 00000153

1939 11789 276 23 16491 1399 00000196

1940 11880 362 31 19782 1665 00000205

1941 11992 534 45 00000213

1942 12105 576 48 00000232

1976 17959 402 22 83236 4635 126

1977 18592 443 24 94564 5086 139

1978 19249 475 25 111224 5778 159

1979 19941 551 4889 28 245 119086 5972 189

1980 20653 589 5005 29 242 107503 5205 243

1981 21386 612 5888 29 275 111687 5222 295

1982 22109 714 6041 32 273 120347 5443 316

1983 22805 682 6595 30 289 131324 5759 326

1984 23475 748 7071 32 301 148740 6336 334

1985 24093 762 7124 32 296 161995 6724 342

1986 24702 855 35 185049 7491 352

1987 25325 662 26 209937 8290 362

1988 25962 704 27 233492 8993 388

1989 26637 637 24 256211 9618 410

1990 27454 740 27 283125 10313 445

1991 28140 828 29 318729 11327 487

1992 28818 934 32 344085 11940 517

1993 29464 1129 38 368007 12490 542

1994 30078 1256 42 404667 13454 576

1995 30659 1338 7198 44 235 447923 14610 602

1996 31168 1216 6958 39 223 486670 15614 632

1997 31689 1254 6944 40 219 498359 15727 660

1998 32134 1166 6269 36 195 477469 14859 709

1999 32645 1267 5520 39 169 487741 14941 715

2000 33738 1529 5934 45 176 512345 15186 731

2001 34401 1669 6447 49 187 519834 15111 761

2002 35021 1842 6188 53 177 534899 15274 782

2003 35598 1905 6258 54 176 543903 15279 809

2004 36072 1943 6268 54 174 559652 15515 838

2005 36437 2279 6107 63 168 579632 15908 861

2006 36961 2736 6621 74 179 601400 16271 881

2007 37425 3074 7749 82 207 619847 16562 903

2008 37971 3584 7981 94 210 616895 16247 945

2009 38440 3571 8541 93 222 617346 16060 971

2010 38946 3785 9244 97 237 638059 16383 1000

Number of taxpayers

(thousands)

Taxpayeradult

population ()

14

Table A2 Threshold Income of Top Income Groups

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1933 185136 74267 46849 16099 10574

1934 204486 74608 47750 15359 9576

1935 203989 75431 48587 15589 9686

1936 186339 71454 45799 14952 9290

1937 230471 89483 54298 16233 10076

1938 223658 84185 52474 16527 10425

1939 204640 71145 46085 13768 8762 2902

1940 244524 83155 54223 16849 10231 3383

1979 134528 76165 59973 32722 25451 12746 8620

1980 131681 71280 49722 30250 23515 12118 7681

1981 129168 69434 53369 28930 22590 11868 8458

1982 135663 70123 54625 31498 24662 13301 8728

1983 148668 80784 62378 34124 26454 14289 9013

1984 164008 83902 65254 35865 28537 14661 9276

1985 176154 83921 64847 36524 28729 15995 10274

1995 491648 203713 145270 78818 59355 37894 27176

1996 537942 235608 167108 87999 65729 45555 38402

1997 565959 246090 176106 92871 70157 46914 39543

1998 448465 192108 138262 78374 59922 42164 35935

1999 486342 224510 163549 89336 67751 44563 37462

2000 567539 228883 179544 100104 76304 48019 39997

2001 638609 255093 190016 103341 78355 48281 39660

2002 690605 274862 208094 96713 86720 50171 40455

2003 715838 282083 211466 97854 88245 50879 40844

2004 798205 307253 206042 114137 93132 53643 37672

2005 856008 321897 216150 110785 88853 49590 34004

2006 948605 361709 246695 123879 99602 62413 41989

2007 1070223 398680 268306 125248 96463 58170 38765

2008 1051085 399573 270898 125218 97522 57701 37631

2009 1022569 397032 270642 124348 96264 56430 36053

2010 1104380 423467 283886 135564 104948 57063 36201

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

8

compute the amount of deductions and exemptions (the difference between income and net taxable

income) by using the data on the tax rate and the tax paid by brackets of net taxable income in income

tax statistics and obtain the data by income brackets The tabulations of wage income tax also provide

the amount of net taxable income by brackets We also need to convert the net taxable income into

total income by adding exemptions and deductions to the net taxable income However the data

source just provides the total amount of wage income without income brackets Thus we compute the

ratios of wage income to net taxable wage income by income brackets from the data of year 2005 and

apply the ratios to other years in order to convert the net taxable income into total wage income

Information needed to compute the double-counted amount of income when we combine the global

income tax and wage income tax in A33 is not available before 2005 Thus from the data for the year

2006 we compute the ratios of the double-counted taxpayers to total taxpayers and their wage income

to total wage income respectively We use the ratios for the period of 1995-2005 in order to remove

the double-counted parts by income brackets

The data for 1979-85 are similar to those for 1995-2004 as mentioned above We do not have to

make adjustments for wage income since we can obtain the amount of wage income by income

brackets for this period However we do not make an adjustment for the overlapping parts for this

period when we combine the global income statistics and wage income statistics First of all the

relevant information is not available for this period Second this period is far too old to use the ratios

computed from the data of year 2006 Third during this period only 3 of taxpayers filed global

income tax returns Thus there were less overlapping taxpayers during this period compared with the

more recent years During this period those who earned a large amount of financial income were

exempt from filing global income tax returns as long as the financial income was their only income

source Overlapping taxpayers not adjusted in this period tend to yield an upward bias in estimating

the top income shares whereas the absence of financial global income tax leads to a downward bias

No additional adjustment is needed for the period of 1933-40 except for the adjustments made in

A32 We also estimate the top income shares based only on the global income tax statistics which

are available since 1976 Although the top income shares estimated this way has a shortcoming for its

narrow coverage of taxpayers compared with those estimated after combining two kinds of income tax

statistics they allow us to estimate the continuous series in the top income shares over 1976-2010

without missing periods

The estimates of the threshold income and the average income for the top percentiles are presented

in Tables A2 and A3 They are converted into real terms at constant 2010 prices by using consumer

price index The estimates of top income shares are presented in Table A4

A4 Top Income Composition

9

The income tax statistics before liberation provide the amount of income by sources without

dividing the taxpayers into separate income brackets Therefore the reported figures under the title of

the top 1 income composition in Table A5 for 1933-42 are not exactly those for top 1 The size of

top income groups varies from the top 14 in 1933 to the top 48 in 1942 We cannot compute the

top income composition between 1942 and 2006 since the income tax statistics do not provide

relevant information for computing the top income composition We obtain income composition for

the top 10 1 01 and 005 for the period of 2007-10 by combining the statistics of global

income tax and wage income tax

The top income composition is presented in Table A5 by income sources such as wage

income(wages salaries bonuses and pension) business income(unincorporated business profits farm

income and self-employment income) rents (rents from farmland and real estate) interest and

dividends After liberation rents from farmland disappeared due to the land reform the rents from real

estate were then included as business income

B Top Wage Income Shares

B1 Wage Income Taxation Data

We cannot estimate the top wage income shares before liberation because the income tax statistics

during this period do not provide data by sources of income After liberation income taxes were

separately withheld at source The Kuksae Tonggae Yonbo [Statistical Yearbook of National Tax]

(Semu Tonggae Yonbo [Statistical Yearbook of Tax Affairs] before 1965) provides the data on the

number of taxpayers the amount of income tax paid and tax rates by income brackets back to the

year 1957 As aforementioned the data source does not provide statistics on separate tax withheld at

source such as wage income tax for the years 1976-1994 Although the data on wage income tax for

1973-85 can be obtained from an internal source they are missing for the years 1986-94

B2 Total Wage Denominator

We need to define control totals for total wage earners and total wage income in order to estimate

the top wage income shares The number of total wage earners changes depending on the sources of

data due to the different coverage of workers The total number of employment in the Kyungje

Hwaldong Ingu Yonbo [Annual Survey on Economically Active Population(ASEAP)] published by

Korea Statistical Office is found to be considerably lower than the number of employment from

income tax statistics in recent years which provide the comprehensive information on wage income

earners including taxpayers workers with wage level below the exemption point and daily workers

10

The reason is that among the workers counted in income tax statistics there are some who are not

classified as employed in the ASEAP It is due to the difference in detecting the status of employment

between the two data sources10

Here we define the control total for wage income earners as the total

number of employment in the ASEAP which includes regular temporary and daily workers The

ASEAP provides data with consistent coverage back to the year 1963 Unfortunately the income tax

statistics does not report information on daily workers before 2008

The total amount of wage income cannot be obtained from income tax statistics and thus computed

from National Accounts Wages and salaries in the table of income account by institutional sectors of

National Accounts net of employerrsquos social contribution are the most comprehensive however they

include earnings of workers who are not classified as employed in the ASEAP The wage income of

this group is estimated to account for 67 of wage and salaries in National Accounts in 200911

Because we do not have relevant data to compute the figure for other years we deflate the wage and

salaries of National accounts for other years by the same rate of 67

The amount of wage and salaries is available in National Accounts since 1975 For earlier years we

extrapolated our estimate in 1975 by using the growth rate of the compensation of employees

presented in the table of distribution of national income in National Accounts published by the Bank

of Korea (1982) The amounts of total and average wage income are converted into those at constant

2010 prices by using the consumer price index The data are presented in Table B1

B3 Top Wage Numerator

The data on the top wage income are obtained by using the number of taxpayers and the amount of

income by income brackets provided by income tax statistics To estimate the income shares of top

percentiles we utilize the same method of Pareto interpolation as presented in A31 Due to the fact

that the information provided by the income tax statistics varies over years we made assumptions to

compute the top wage income Because we already explained the data on wage income for the periods

10

The ASEAP defines a worker as employed if he or she works more than one hour for pay during a surveyed

week which is much shorter than the time span for income tax statistics which detect the employment based

on the record of pay during a year

11 The income tax statistics in 2009 allows us to estimate the proportion of income earned by daily workers who

are not classified as employed in the ASEAP The income level of this group of workers is very low By

assuming that workers with a lower level of wage income in the income tax statistics tend to be classified as

unemployed we compute the amount of wage income accruing to the workers who should not be classified as

employed so that the number of employment in the income tax statistics may equal the total employment in

the ASEAP This is estimated to be 67 of wage and salaries in National Accounts in 2009

11

of 1995-2010 and 1979-1985 in A34 we focus on the data of the earlier period here

The data on income tax for the period of 1973-78 are taken from Juyo Saemu Tonggae[Statistics on

Major Tax Affairs] an unpublished internal document reported in 1981 This source provides the

number of taxpayers and the amount of tax paid by income brackets without specifying the amount of

wage income It is similar to the situation of Case B data in A32 In A32 we estimate the average

income of an income bracket by estimating d when the average income is specified as L+(H-L)d

where L and H are the upper and lower thresholds respectively Because we know the total income

we assume that d is constant in all the income brackets and thus we can estimate d However we do

not have information on total wage income here Thus we assume that the average wage income is

15L for the highest income bracket and therefore compute the average wage income for other

income brackets by fixing d equal to 04 which is based on the estimate from the adjacent year when

the data are available to estimate d Finally we compute the total wage income by income brackets by

multiplying the number of taxpayers and the average wage income

The data for 1968-72 are taken from Kuksae Tonggae Yeonbo [Statistical Yearbook of National Tax]

which provides the tax rate the number of taxpayers the amount of income and tax paid by income

brackets The amount of income in 1970-72 can be used directly because it equals the total wage

income to workers However in 1969-68 we have data on the amount of net taxable income which

needs to be converted to the amount of wage income taxpayers earned Since the conversion rate

cannot be estimated based on the data for this period we use the conversion rate by income brackets

for 1970 instead The conversion rate in 1970 is the ratio of total wage income to net taxable income

which is estimated by using the tax rate and the amount of tax paid by income brackets

The Statistical Yearbook of National Tax in 1957-67 provides two kinds of tables on income tax

statistics One is the table which provides the tax rate the number of taxpayers and the amount of

income by income brackets The information from this table is adequate for our purpose yet income

bracket is too coarse to be used with a small number of brackets The other table divides income

groups into finer brackets but provides only the number of taxpayers It is similar to Case B data in

A32 Thus we apply the same method as used for Case B data to the latter table and estimate the

amount of income by income brackets We also use the conversion rate for 1970 to convert the amount

of net taxable income into total wage income for this period because the table provides the amount of

net taxable income only

The threshold income and the average income for top income groups are presented in Tables B2 and

B3 They are also converted to constant 2010 prices by using the consumer price index Top income

shares are presented in Table B4 Although wage income tax statistics go back to the year 1957 we

can estimate the top income shares since 1963 because the ASEAP is available since 1963

B4 Marginal Tax Rates for Top Wage Income Earners

12

The marginal tax rates(MTRs) at the wage income threshold for the top wage income groups such

as the top 10 1 01 and 001 are estimated by using the method of Moriguchi and Saez (2008

Appendix C3) We assume that a taxpayer at each threshold income has only wage income and forms

a household with a non-working spouse and two dependent children We compute the net taxable

income by subtracting exemptions and deductions based on the income tax law in the corresponding

years from the threshold income and use the tax schedule to obtain the MTRs The estimates of MTRs

are presented in Table B5

By using the MTR at each threshold income we can obtain the MTR for the average taxpayer of

each top income group To obtain the MTR of the average taxpayer in the top 01 group we take the

weighted average of the average taxpayers of the top 001 and the top 01-001

ltInsert Table A1 ~ Table A5gt

ltInsert Table B1 ~ Table B5gt

ltInsert Figure A1gt

13

Table A1 Adult Population Number of Taxpayers Income and CPI

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) Total income and average income are at constant 2010 prices

Total adult

population(a

ge 20 and

over)

Toal incomeAverage

incomeCPI

(thousands)Global

income tax

Wage

income tax

Global

income tax

Wage

income tax(billion won)

(thousand

won)(2010=100)

A B C BA CA D DA E

1933 11094 154 14 14107 1272 00000103

1934 11262 173 15 14280 1268 00000114

1935 11432 193 17 16170 1414 00000122

1936 11520 198 17 16051 1393 00000129

1937 11609 237 20 19104 1646 00000140

1938 11699 269 23 18743 1602 00000153

1939 11789 276 23 16491 1399 00000196

1940 11880 362 31 19782 1665 00000205

1941 11992 534 45 00000213

1942 12105 576 48 00000232

1976 17959 402 22 83236 4635 126

1977 18592 443 24 94564 5086 139

1978 19249 475 25 111224 5778 159

1979 19941 551 4889 28 245 119086 5972 189

1980 20653 589 5005 29 242 107503 5205 243

1981 21386 612 5888 29 275 111687 5222 295

1982 22109 714 6041 32 273 120347 5443 316

1983 22805 682 6595 30 289 131324 5759 326

1984 23475 748 7071 32 301 148740 6336 334

1985 24093 762 7124 32 296 161995 6724 342

1986 24702 855 35 185049 7491 352

1987 25325 662 26 209937 8290 362

1988 25962 704 27 233492 8993 388

1989 26637 637 24 256211 9618 410

1990 27454 740 27 283125 10313 445

1991 28140 828 29 318729 11327 487

1992 28818 934 32 344085 11940 517

1993 29464 1129 38 368007 12490 542

1994 30078 1256 42 404667 13454 576

1995 30659 1338 7198 44 235 447923 14610 602

1996 31168 1216 6958 39 223 486670 15614 632

1997 31689 1254 6944 40 219 498359 15727 660

1998 32134 1166 6269 36 195 477469 14859 709

1999 32645 1267 5520 39 169 487741 14941 715

2000 33738 1529 5934 45 176 512345 15186 731

2001 34401 1669 6447 49 187 519834 15111 761

2002 35021 1842 6188 53 177 534899 15274 782

2003 35598 1905 6258 54 176 543903 15279 809

2004 36072 1943 6268 54 174 559652 15515 838

2005 36437 2279 6107 63 168 579632 15908 861

2006 36961 2736 6621 74 179 601400 16271 881

2007 37425 3074 7749 82 207 619847 16562 903

2008 37971 3584 7981 94 210 616895 16247 945

2009 38440 3571 8541 93 222 617346 16060 971

2010 38946 3785 9244 97 237 638059 16383 1000

Number of taxpayers

(thousands)

Taxpayeradult

population ()

14

Table A2 Threshold Income of Top Income Groups

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1933 185136 74267 46849 16099 10574

1934 204486 74608 47750 15359 9576

1935 203989 75431 48587 15589 9686

1936 186339 71454 45799 14952 9290

1937 230471 89483 54298 16233 10076

1938 223658 84185 52474 16527 10425

1939 204640 71145 46085 13768 8762 2902

1940 244524 83155 54223 16849 10231 3383

1979 134528 76165 59973 32722 25451 12746 8620

1980 131681 71280 49722 30250 23515 12118 7681

1981 129168 69434 53369 28930 22590 11868 8458

1982 135663 70123 54625 31498 24662 13301 8728

1983 148668 80784 62378 34124 26454 14289 9013

1984 164008 83902 65254 35865 28537 14661 9276

1985 176154 83921 64847 36524 28729 15995 10274

1995 491648 203713 145270 78818 59355 37894 27176

1996 537942 235608 167108 87999 65729 45555 38402

1997 565959 246090 176106 92871 70157 46914 39543

1998 448465 192108 138262 78374 59922 42164 35935

1999 486342 224510 163549 89336 67751 44563 37462

2000 567539 228883 179544 100104 76304 48019 39997

2001 638609 255093 190016 103341 78355 48281 39660

2002 690605 274862 208094 96713 86720 50171 40455

2003 715838 282083 211466 97854 88245 50879 40844

2004 798205 307253 206042 114137 93132 53643 37672

2005 856008 321897 216150 110785 88853 49590 34004

2006 948605 361709 246695 123879 99602 62413 41989

2007 1070223 398680 268306 125248 96463 58170 38765

2008 1051085 399573 270898 125218 97522 57701 37631

2009 1022569 397032 270642 124348 96264 56430 36053

2010 1104380 423467 283886 135564 104948 57063 36201

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

9

The income tax statistics before liberation provide the amount of income by sources without

dividing the taxpayers into separate income brackets Therefore the reported figures under the title of

the top 1 income composition in Table A5 for 1933-42 are not exactly those for top 1 The size of

top income groups varies from the top 14 in 1933 to the top 48 in 1942 We cannot compute the

top income composition between 1942 and 2006 since the income tax statistics do not provide

relevant information for computing the top income composition We obtain income composition for

the top 10 1 01 and 005 for the period of 2007-10 by combining the statistics of global

income tax and wage income tax

The top income composition is presented in Table A5 by income sources such as wage

income(wages salaries bonuses and pension) business income(unincorporated business profits farm

income and self-employment income) rents (rents from farmland and real estate) interest and

dividends After liberation rents from farmland disappeared due to the land reform the rents from real

estate were then included as business income

B Top Wage Income Shares

B1 Wage Income Taxation Data

We cannot estimate the top wage income shares before liberation because the income tax statistics

during this period do not provide data by sources of income After liberation income taxes were

separately withheld at source The Kuksae Tonggae Yonbo [Statistical Yearbook of National Tax]

(Semu Tonggae Yonbo [Statistical Yearbook of Tax Affairs] before 1965) provides the data on the

number of taxpayers the amount of income tax paid and tax rates by income brackets back to the

year 1957 As aforementioned the data source does not provide statistics on separate tax withheld at

source such as wage income tax for the years 1976-1994 Although the data on wage income tax for

1973-85 can be obtained from an internal source they are missing for the years 1986-94

B2 Total Wage Denominator

We need to define control totals for total wage earners and total wage income in order to estimate

the top wage income shares The number of total wage earners changes depending on the sources of

data due to the different coverage of workers The total number of employment in the Kyungje

Hwaldong Ingu Yonbo [Annual Survey on Economically Active Population(ASEAP)] published by

Korea Statistical Office is found to be considerably lower than the number of employment from

income tax statistics in recent years which provide the comprehensive information on wage income

earners including taxpayers workers with wage level below the exemption point and daily workers

10

The reason is that among the workers counted in income tax statistics there are some who are not

classified as employed in the ASEAP It is due to the difference in detecting the status of employment

between the two data sources10

Here we define the control total for wage income earners as the total

number of employment in the ASEAP which includes regular temporary and daily workers The

ASEAP provides data with consistent coverage back to the year 1963 Unfortunately the income tax

statistics does not report information on daily workers before 2008

The total amount of wage income cannot be obtained from income tax statistics and thus computed

from National Accounts Wages and salaries in the table of income account by institutional sectors of

National Accounts net of employerrsquos social contribution are the most comprehensive however they

include earnings of workers who are not classified as employed in the ASEAP The wage income of

this group is estimated to account for 67 of wage and salaries in National Accounts in 200911

Because we do not have relevant data to compute the figure for other years we deflate the wage and

salaries of National accounts for other years by the same rate of 67

The amount of wage and salaries is available in National Accounts since 1975 For earlier years we

extrapolated our estimate in 1975 by using the growth rate of the compensation of employees

presented in the table of distribution of national income in National Accounts published by the Bank

of Korea (1982) The amounts of total and average wage income are converted into those at constant

2010 prices by using the consumer price index The data are presented in Table B1

B3 Top Wage Numerator

The data on the top wage income are obtained by using the number of taxpayers and the amount of

income by income brackets provided by income tax statistics To estimate the income shares of top

percentiles we utilize the same method of Pareto interpolation as presented in A31 Due to the fact

that the information provided by the income tax statistics varies over years we made assumptions to

compute the top wage income Because we already explained the data on wage income for the periods

10

The ASEAP defines a worker as employed if he or she works more than one hour for pay during a surveyed

week which is much shorter than the time span for income tax statistics which detect the employment based

on the record of pay during a year

11 The income tax statistics in 2009 allows us to estimate the proportion of income earned by daily workers who

are not classified as employed in the ASEAP The income level of this group of workers is very low By

assuming that workers with a lower level of wage income in the income tax statistics tend to be classified as

unemployed we compute the amount of wage income accruing to the workers who should not be classified as

employed so that the number of employment in the income tax statistics may equal the total employment in

the ASEAP This is estimated to be 67 of wage and salaries in National Accounts in 2009

11

of 1995-2010 and 1979-1985 in A34 we focus on the data of the earlier period here

The data on income tax for the period of 1973-78 are taken from Juyo Saemu Tonggae[Statistics on

Major Tax Affairs] an unpublished internal document reported in 1981 This source provides the

number of taxpayers and the amount of tax paid by income brackets without specifying the amount of

wage income It is similar to the situation of Case B data in A32 In A32 we estimate the average

income of an income bracket by estimating d when the average income is specified as L+(H-L)d

where L and H are the upper and lower thresholds respectively Because we know the total income

we assume that d is constant in all the income brackets and thus we can estimate d However we do

not have information on total wage income here Thus we assume that the average wage income is

15L for the highest income bracket and therefore compute the average wage income for other

income brackets by fixing d equal to 04 which is based on the estimate from the adjacent year when

the data are available to estimate d Finally we compute the total wage income by income brackets by

multiplying the number of taxpayers and the average wage income

The data for 1968-72 are taken from Kuksae Tonggae Yeonbo [Statistical Yearbook of National Tax]

which provides the tax rate the number of taxpayers the amount of income and tax paid by income

brackets The amount of income in 1970-72 can be used directly because it equals the total wage

income to workers However in 1969-68 we have data on the amount of net taxable income which

needs to be converted to the amount of wage income taxpayers earned Since the conversion rate

cannot be estimated based on the data for this period we use the conversion rate by income brackets

for 1970 instead The conversion rate in 1970 is the ratio of total wage income to net taxable income

which is estimated by using the tax rate and the amount of tax paid by income brackets

The Statistical Yearbook of National Tax in 1957-67 provides two kinds of tables on income tax

statistics One is the table which provides the tax rate the number of taxpayers and the amount of

income by income brackets The information from this table is adequate for our purpose yet income

bracket is too coarse to be used with a small number of brackets The other table divides income

groups into finer brackets but provides only the number of taxpayers It is similar to Case B data in

A32 Thus we apply the same method as used for Case B data to the latter table and estimate the

amount of income by income brackets We also use the conversion rate for 1970 to convert the amount

of net taxable income into total wage income for this period because the table provides the amount of

net taxable income only

The threshold income and the average income for top income groups are presented in Tables B2 and

B3 They are also converted to constant 2010 prices by using the consumer price index Top income

shares are presented in Table B4 Although wage income tax statistics go back to the year 1957 we

can estimate the top income shares since 1963 because the ASEAP is available since 1963

B4 Marginal Tax Rates for Top Wage Income Earners

12

The marginal tax rates(MTRs) at the wage income threshold for the top wage income groups such

as the top 10 1 01 and 001 are estimated by using the method of Moriguchi and Saez (2008

Appendix C3) We assume that a taxpayer at each threshold income has only wage income and forms

a household with a non-working spouse and two dependent children We compute the net taxable

income by subtracting exemptions and deductions based on the income tax law in the corresponding

years from the threshold income and use the tax schedule to obtain the MTRs The estimates of MTRs

are presented in Table B5

By using the MTR at each threshold income we can obtain the MTR for the average taxpayer of

each top income group To obtain the MTR of the average taxpayer in the top 01 group we take the

weighted average of the average taxpayers of the top 001 and the top 01-001

ltInsert Table A1 ~ Table A5gt

ltInsert Table B1 ~ Table B5gt

ltInsert Figure A1gt

13

Table A1 Adult Population Number of Taxpayers Income and CPI

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) Total income and average income are at constant 2010 prices

Total adult

population(a

ge 20 and

over)

Toal incomeAverage

incomeCPI

(thousands)Global

income tax

Wage

income tax

Global

income tax

Wage

income tax(billion won)

(thousand

won)(2010=100)

A B C BA CA D DA E

1933 11094 154 14 14107 1272 00000103

1934 11262 173 15 14280 1268 00000114

1935 11432 193 17 16170 1414 00000122

1936 11520 198 17 16051 1393 00000129

1937 11609 237 20 19104 1646 00000140

1938 11699 269 23 18743 1602 00000153

1939 11789 276 23 16491 1399 00000196

1940 11880 362 31 19782 1665 00000205

1941 11992 534 45 00000213

1942 12105 576 48 00000232

1976 17959 402 22 83236 4635 126

1977 18592 443 24 94564 5086 139

1978 19249 475 25 111224 5778 159

1979 19941 551 4889 28 245 119086 5972 189

1980 20653 589 5005 29 242 107503 5205 243

1981 21386 612 5888 29 275 111687 5222 295

1982 22109 714 6041 32 273 120347 5443 316

1983 22805 682 6595 30 289 131324 5759 326

1984 23475 748 7071 32 301 148740 6336 334

1985 24093 762 7124 32 296 161995 6724 342

1986 24702 855 35 185049 7491 352

1987 25325 662 26 209937 8290 362

1988 25962 704 27 233492 8993 388

1989 26637 637 24 256211 9618 410

1990 27454 740 27 283125 10313 445

1991 28140 828 29 318729 11327 487

1992 28818 934 32 344085 11940 517

1993 29464 1129 38 368007 12490 542

1994 30078 1256 42 404667 13454 576

1995 30659 1338 7198 44 235 447923 14610 602

1996 31168 1216 6958 39 223 486670 15614 632

1997 31689 1254 6944 40 219 498359 15727 660

1998 32134 1166 6269 36 195 477469 14859 709

1999 32645 1267 5520 39 169 487741 14941 715

2000 33738 1529 5934 45 176 512345 15186 731

2001 34401 1669 6447 49 187 519834 15111 761

2002 35021 1842 6188 53 177 534899 15274 782

2003 35598 1905 6258 54 176 543903 15279 809

2004 36072 1943 6268 54 174 559652 15515 838

2005 36437 2279 6107 63 168 579632 15908 861

2006 36961 2736 6621 74 179 601400 16271 881

2007 37425 3074 7749 82 207 619847 16562 903

2008 37971 3584 7981 94 210 616895 16247 945

2009 38440 3571 8541 93 222 617346 16060 971

2010 38946 3785 9244 97 237 638059 16383 1000

Number of taxpayers

(thousands)

Taxpayeradult

population ()

14

Table A2 Threshold Income of Top Income Groups

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1933 185136 74267 46849 16099 10574

1934 204486 74608 47750 15359 9576

1935 203989 75431 48587 15589 9686

1936 186339 71454 45799 14952 9290

1937 230471 89483 54298 16233 10076

1938 223658 84185 52474 16527 10425

1939 204640 71145 46085 13768 8762 2902

1940 244524 83155 54223 16849 10231 3383

1979 134528 76165 59973 32722 25451 12746 8620

1980 131681 71280 49722 30250 23515 12118 7681

1981 129168 69434 53369 28930 22590 11868 8458

1982 135663 70123 54625 31498 24662 13301 8728

1983 148668 80784 62378 34124 26454 14289 9013

1984 164008 83902 65254 35865 28537 14661 9276

1985 176154 83921 64847 36524 28729 15995 10274

1995 491648 203713 145270 78818 59355 37894 27176

1996 537942 235608 167108 87999 65729 45555 38402

1997 565959 246090 176106 92871 70157 46914 39543

1998 448465 192108 138262 78374 59922 42164 35935

1999 486342 224510 163549 89336 67751 44563 37462

2000 567539 228883 179544 100104 76304 48019 39997

2001 638609 255093 190016 103341 78355 48281 39660

2002 690605 274862 208094 96713 86720 50171 40455

2003 715838 282083 211466 97854 88245 50879 40844

2004 798205 307253 206042 114137 93132 53643 37672

2005 856008 321897 216150 110785 88853 49590 34004

2006 948605 361709 246695 123879 99602 62413 41989

2007 1070223 398680 268306 125248 96463 58170 38765

2008 1051085 399573 270898 125218 97522 57701 37631

2009 1022569 397032 270642 124348 96264 56430 36053

2010 1104380 423467 283886 135564 104948 57063 36201

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

10

The reason is that among the workers counted in income tax statistics there are some who are not

classified as employed in the ASEAP It is due to the difference in detecting the status of employment

between the two data sources10

Here we define the control total for wage income earners as the total

number of employment in the ASEAP which includes regular temporary and daily workers The

ASEAP provides data with consistent coverage back to the year 1963 Unfortunately the income tax

statistics does not report information on daily workers before 2008

The total amount of wage income cannot be obtained from income tax statistics and thus computed

from National Accounts Wages and salaries in the table of income account by institutional sectors of

National Accounts net of employerrsquos social contribution are the most comprehensive however they

include earnings of workers who are not classified as employed in the ASEAP The wage income of

this group is estimated to account for 67 of wage and salaries in National Accounts in 200911

Because we do not have relevant data to compute the figure for other years we deflate the wage and

salaries of National accounts for other years by the same rate of 67

The amount of wage and salaries is available in National Accounts since 1975 For earlier years we

extrapolated our estimate in 1975 by using the growth rate of the compensation of employees

presented in the table of distribution of national income in National Accounts published by the Bank

of Korea (1982) The amounts of total and average wage income are converted into those at constant

2010 prices by using the consumer price index The data are presented in Table B1

B3 Top Wage Numerator

The data on the top wage income are obtained by using the number of taxpayers and the amount of

income by income brackets provided by income tax statistics To estimate the income shares of top

percentiles we utilize the same method of Pareto interpolation as presented in A31 Due to the fact

that the information provided by the income tax statistics varies over years we made assumptions to

compute the top wage income Because we already explained the data on wage income for the periods

10

The ASEAP defines a worker as employed if he or she works more than one hour for pay during a surveyed

week which is much shorter than the time span for income tax statistics which detect the employment based

on the record of pay during a year

11 The income tax statistics in 2009 allows us to estimate the proportion of income earned by daily workers who

are not classified as employed in the ASEAP The income level of this group of workers is very low By

assuming that workers with a lower level of wage income in the income tax statistics tend to be classified as

unemployed we compute the amount of wage income accruing to the workers who should not be classified as

employed so that the number of employment in the income tax statistics may equal the total employment in

the ASEAP This is estimated to be 67 of wage and salaries in National Accounts in 2009

11

of 1995-2010 and 1979-1985 in A34 we focus on the data of the earlier period here

The data on income tax for the period of 1973-78 are taken from Juyo Saemu Tonggae[Statistics on

Major Tax Affairs] an unpublished internal document reported in 1981 This source provides the

number of taxpayers and the amount of tax paid by income brackets without specifying the amount of

wage income It is similar to the situation of Case B data in A32 In A32 we estimate the average

income of an income bracket by estimating d when the average income is specified as L+(H-L)d

where L and H are the upper and lower thresholds respectively Because we know the total income

we assume that d is constant in all the income brackets and thus we can estimate d However we do

not have information on total wage income here Thus we assume that the average wage income is

15L for the highest income bracket and therefore compute the average wage income for other

income brackets by fixing d equal to 04 which is based on the estimate from the adjacent year when

the data are available to estimate d Finally we compute the total wage income by income brackets by

multiplying the number of taxpayers and the average wage income

The data for 1968-72 are taken from Kuksae Tonggae Yeonbo [Statistical Yearbook of National Tax]

which provides the tax rate the number of taxpayers the amount of income and tax paid by income

brackets The amount of income in 1970-72 can be used directly because it equals the total wage

income to workers However in 1969-68 we have data on the amount of net taxable income which

needs to be converted to the amount of wage income taxpayers earned Since the conversion rate

cannot be estimated based on the data for this period we use the conversion rate by income brackets

for 1970 instead The conversion rate in 1970 is the ratio of total wage income to net taxable income

which is estimated by using the tax rate and the amount of tax paid by income brackets

The Statistical Yearbook of National Tax in 1957-67 provides two kinds of tables on income tax

statistics One is the table which provides the tax rate the number of taxpayers and the amount of

income by income brackets The information from this table is adequate for our purpose yet income

bracket is too coarse to be used with a small number of brackets The other table divides income

groups into finer brackets but provides only the number of taxpayers It is similar to Case B data in

A32 Thus we apply the same method as used for Case B data to the latter table and estimate the

amount of income by income brackets We also use the conversion rate for 1970 to convert the amount

of net taxable income into total wage income for this period because the table provides the amount of

net taxable income only

The threshold income and the average income for top income groups are presented in Tables B2 and

B3 They are also converted to constant 2010 prices by using the consumer price index Top income

shares are presented in Table B4 Although wage income tax statistics go back to the year 1957 we

can estimate the top income shares since 1963 because the ASEAP is available since 1963

B4 Marginal Tax Rates for Top Wage Income Earners

12

The marginal tax rates(MTRs) at the wage income threshold for the top wage income groups such

as the top 10 1 01 and 001 are estimated by using the method of Moriguchi and Saez (2008

Appendix C3) We assume that a taxpayer at each threshold income has only wage income and forms

a household with a non-working spouse and two dependent children We compute the net taxable

income by subtracting exemptions and deductions based on the income tax law in the corresponding

years from the threshold income and use the tax schedule to obtain the MTRs The estimates of MTRs

are presented in Table B5

By using the MTR at each threshold income we can obtain the MTR for the average taxpayer of

each top income group To obtain the MTR of the average taxpayer in the top 01 group we take the

weighted average of the average taxpayers of the top 001 and the top 01-001

ltInsert Table A1 ~ Table A5gt

ltInsert Table B1 ~ Table B5gt

ltInsert Figure A1gt

13

Table A1 Adult Population Number of Taxpayers Income and CPI

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) Total income and average income are at constant 2010 prices

Total adult

population(a

ge 20 and

over)

Toal incomeAverage

incomeCPI

(thousands)Global

income tax

Wage

income tax

Global

income tax

Wage

income tax(billion won)

(thousand

won)(2010=100)

A B C BA CA D DA E

1933 11094 154 14 14107 1272 00000103

1934 11262 173 15 14280 1268 00000114

1935 11432 193 17 16170 1414 00000122

1936 11520 198 17 16051 1393 00000129

1937 11609 237 20 19104 1646 00000140

1938 11699 269 23 18743 1602 00000153

1939 11789 276 23 16491 1399 00000196

1940 11880 362 31 19782 1665 00000205

1941 11992 534 45 00000213

1942 12105 576 48 00000232

1976 17959 402 22 83236 4635 126

1977 18592 443 24 94564 5086 139

1978 19249 475 25 111224 5778 159

1979 19941 551 4889 28 245 119086 5972 189

1980 20653 589 5005 29 242 107503 5205 243

1981 21386 612 5888 29 275 111687 5222 295

1982 22109 714 6041 32 273 120347 5443 316

1983 22805 682 6595 30 289 131324 5759 326

1984 23475 748 7071 32 301 148740 6336 334

1985 24093 762 7124 32 296 161995 6724 342

1986 24702 855 35 185049 7491 352

1987 25325 662 26 209937 8290 362

1988 25962 704 27 233492 8993 388

1989 26637 637 24 256211 9618 410

1990 27454 740 27 283125 10313 445

1991 28140 828 29 318729 11327 487

1992 28818 934 32 344085 11940 517

1993 29464 1129 38 368007 12490 542

1994 30078 1256 42 404667 13454 576

1995 30659 1338 7198 44 235 447923 14610 602

1996 31168 1216 6958 39 223 486670 15614 632

1997 31689 1254 6944 40 219 498359 15727 660

1998 32134 1166 6269 36 195 477469 14859 709

1999 32645 1267 5520 39 169 487741 14941 715

2000 33738 1529 5934 45 176 512345 15186 731

2001 34401 1669 6447 49 187 519834 15111 761

2002 35021 1842 6188 53 177 534899 15274 782

2003 35598 1905 6258 54 176 543903 15279 809

2004 36072 1943 6268 54 174 559652 15515 838

2005 36437 2279 6107 63 168 579632 15908 861

2006 36961 2736 6621 74 179 601400 16271 881

2007 37425 3074 7749 82 207 619847 16562 903

2008 37971 3584 7981 94 210 616895 16247 945

2009 38440 3571 8541 93 222 617346 16060 971

2010 38946 3785 9244 97 237 638059 16383 1000

Number of taxpayers

(thousands)

Taxpayeradult

population ()

14

Table A2 Threshold Income of Top Income Groups

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1933 185136 74267 46849 16099 10574

1934 204486 74608 47750 15359 9576

1935 203989 75431 48587 15589 9686

1936 186339 71454 45799 14952 9290

1937 230471 89483 54298 16233 10076

1938 223658 84185 52474 16527 10425

1939 204640 71145 46085 13768 8762 2902

1940 244524 83155 54223 16849 10231 3383

1979 134528 76165 59973 32722 25451 12746 8620

1980 131681 71280 49722 30250 23515 12118 7681

1981 129168 69434 53369 28930 22590 11868 8458

1982 135663 70123 54625 31498 24662 13301 8728

1983 148668 80784 62378 34124 26454 14289 9013

1984 164008 83902 65254 35865 28537 14661 9276

1985 176154 83921 64847 36524 28729 15995 10274

1995 491648 203713 145270 78818 59355 37894 27176

1996 537942 235608 167108 87999 65729 45555 38402

1997 565959 246090 176106 92871 70157 46914 39543

1998 448465 192108 138262 78374 59922 42164 35935

1999 486342 224510 163549 89336 67751 44563 37462

2000 567539 228883 179544 100104 76304 48019 39997

2001 638609 255093 190016 103341 78355 48281 39660

2002 690605 274862 208094 96713 86720 50171 40455

2003 715838 282083 211466 97854 88245 50879 40844

2004 798205 307253 206042 114137 93132 53643 37672

2005 856008 321897 216150 110785 88853 49590 34004

2006 948605 361709 246695 123879 99602 62413 41989

2007 1070223 398680 268306 125248 96463 58170 38765

2008 1051085 399573 270898 125218 97522 57701 37631

2009 1022569 397032 270642 124348 96264 56430 36053

2010 1104380 423467 283886 135564 104948 57063 36201

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

11

of 1995-2010 and 1979-1985 in A34 we focus on the data of the earlier period here

The data on income tax for the period of 1973-78 are taken from Juyo Saemu Tonggae[Statistics on

Major Tax Affairs] an unpublished internal document reported in 1981 This source provides the

number of taxpayers and the amount of tax paid by income brackets without specifying the amount of

wage income It is similar to the situation of Case B data in A32 In A32 we estimate the average

income of an income bracket by estimating d when the average income is specified as L+(H-L)d

where L and H are the upper and lower thresholds respectively Because we know the total income

we assume that d is constant in all the income brackets and thus we can estimate d However we do

not have information on total wage income here Thus we assume that the average wage income is

15L for the highest income bracket and therefore compute the average wage income for other

income brackets by fixing d equal to 04 which is based on the estimate from the adjacent year when

the data are available to estimate d Finally we compute the total wage income by income brackets by

multiplying the number of taxpayers and the average wage income

The data for 1968-72 are taken from Kuksae Tonggae Yeonbo [Statistical Yearbook of National Tax]

which provides the tax rate the number of taxpayers the amount of income and tax paid by income

brackets The amount of income in 1970-72 can be used directly because it equals the total wage

income to workers However in 1969-68 we have data on the amount of net taxable income which

needs to be converted to the amount of wage income taxpayers earned Since the conversion rate

cannot be estimated based on the data for this period we use the conversion rate by income brackets

for 1970 instead The conversion rate in 1970 is the ratio of total wage income to net taxable income

which is estimated by using the tax rate and the amount of tax paid by income brackets

The Statistical Yearbook of National Tax in 1957-67 provides two kinds of tables on income tax

statistics One is the table which provides the tax rate the number of taxpayers and the amount of

income by income brackets The information from this table is adequate for our purpose yet income

bracket is too coarse to be used with a small number of brackets The other table divides income

groups into finer brackets but provides only the number of taxpayers It is similar to Case B data in

A32 Thus we apply the same method as used for Case B data to the latter table and estimate the

amount of income by income brackets We also use the conversion rate for 1970 to convert the amount

of net taxable income into total wage income for this period because the table provides the amount of

net taxable income only

The threshold income and the average income for top income groups are presented in Tables B2 and

B3 They are also converted to constant 2010 prices by using the consumer price index Top income

shares are presented in Table B4 Although wage income tax statistics go back to the year 1957 we

can estimate the top income shares since 1963 because the ASEAP is available since 1963

B4 Marginal Tax Rates for Top Wage Income Earners

12

The marginal tax rates(MTRs) at the wage income threshold for the top wage income groups such

as the top 10 1 01 and 001 are estimated by using the method of Moriguchi and Saez (2008

Appendix C3) We assume that a taxpayer at each threshold income has only wage income and forms

a household with a non-working spouse and two dependent children We compute the net taxable

income by subtracting exemptions and deductions based on the income tax law in the corresponding

years from the threshold income and use the tax schedule to obtain the MTRs The estimates of MTRs

are presented in Table B5

By using the MTR at each threshold income we can obtain the MTR for the average taxpayer of

each top income group To obtain the MTR of the average taxpayer in the top 01 group we take the

weighted average of the average taxpayers of the top 001 and the top 01-001

ltInsert Table A1 ~ Table A5gt

ltInsert Table B1 ~ Table B5gt

ltInsert Figure A1gt

13

Table A1 Adult Population Number of Taxpayers Income and CPI

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) Total income and average income are at constant 2010 prices

Total adult

population(a

ge 20 and

over)

Toal incomeAverage

incomeCPI

(thousands)Global

income tax

Wage

income tax

Global

income tax

Wage

income tax(billion won)

(thousand

won)(2010=100)

A B C BA CA D DA E

1933 11094 154 14 14107 1272 00000103

1934 11262 173 15 14280 1268 00000114

1935 11432 193 17 16170 1414 00000122

1936 11520 198 17 16051 1393 00000129

1937 11609 237 20 19104 1646 00000140

1938 11699 269 23 18743 1602 00000153

1939 11789 276 23 16491 1399 00000196

1940 11880 362 31 19782 1665 00000205

1941 11992 534 45 00000213

1942 12105 576 48 00000232

1976 17959 402 22 83236 4635 126

1977 18592 443 24 94564 5086 139

1978 19249 475 25 111224 5778 159

1979 19941 551 4889 28 245 119086 5972 189

1980 20653 589 5005 29 242 107503 5205 243

1981 21386 612 5888 29 275 111687 5222 295

1982 22109 714 6041 32 273 120347 5443 316

1983 22805 682 6595 30 289 131324 5759 326

1984 23475 748 7071 32 301 148740 6336 334

1985 24093 762 7124 32 296 161995 6724 342

1986 24702 855 35 185049 7491 352

1987 25325 662 26 209937 8290 362

1988 25962 704 27 233492 8993 388

1989 26637 637 24 256211 9618 410

1990 27454 740 27 283125 10313 445

1991 28140 828 29 318729 11327 487

1992 28818 934 32 344085 11940 517

1993 29464 1129 38 368007 12490 542

1994 30078 1256 42 404667 13454 576

1995 30659 1338 7198 44 235 447923 14610 602

1996 31168 1216 6958 39 223 486670 15614 632

1997 31689 1254 6944 40 219 498359 15727 660

1998 32134 1166 6269 36 195 477469 14859 709

1999 32645 1267 5520 39 169 487741 14941 715

2000 33738 1529 5934 45 176 512345 15186 731

2001 34401 1669 6447 49 187 519834 15111 761

2002 35021 1842 6188 53 177 534899 15274 782

2003 35598 1905 6258 54 176 543903 15279 809

2004 36072 1943 6268 54 174 559652 15515 838

2005 36437 2279 6107 63 168 579632 15908 861

2006 36961 2736 6621 74 179 601400 16271 881

2007 37425 3074 7749 82 207 619847 16562 903

2008 37971 3584 7981 94 210 616895 16247 945

2009 38440 3571 8541 93 222 617346 16060 971

2010 38946 3785 9244 97 237 638059 16383 1000

Number of taxpayers

(thousands)

Taxpayeradult

population ()

14

Table A2 Threshold Income of Top Income Groups

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1933 185136 74267 46849 16099 10574

1934 204486 74608 47750 15359 9576

1935 203989 75431 48587 15589 9686

1936 186339 71454 45799 14952 9290

1937 230471 89483 54298 16233 10076

1938 223658 84185 52474 16527 10425

1939 204640 71145 46085 13768 8762 2902

1940 244524 83155 54223 16849 10231 3383

1979 134528 76165 59973 32722 25451 12746 8620

1980 131681 71280 49722 30250 23515 12118 7681

1981 129168 69434 53369 28930 22590 11868 8458

1982 135663 70123 54625 31498 24662 13301 8728

1983 148668 80784 62378 34124 26454 14289 9013

1984 164008 83902 65254 35865 28537 14661 9276

1985 176154 83921 64847 36524 28729 15995 10274

1995 491648 203713 145270 78818 59355 37894 27176

1996 537942 235608 167108 87999 65729 45555 38402

1997 565959 246090 176106 92871 70157 46914 39543

1998 448465 192108 138262 78374 59922 42164 35935

1999 486342 224510 163549 89336 67751 44563 37462

2000 567539 228883 179544 100104 76304 48019 39997

2001 638609 255093 190016 103341 78355 48281 39660

2002 690605 274862 208094 96713 86720 50171 40455

2003 715838 282083 211466 97854 88245 50879 40844

2004 798205 307253 206042 114137 93132 53643 37672

2005 856008 321897 216150 110785 88853 49590 34004

2006 948605 361709 246695 123879 99602 62413 41989

2007 1070223 398680 268306 125248 96463 58170 38765

2008 1051085 399573 270898 125218 97522 57701 37631

2009 1022569 397032 270642 124348 96264 56430 36053

2010 1104380 423467 283886 135564 104948 57063 36201

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

12

The marginal tax rates(MTRs) at the wage income threshold for the top wage income groups such

as the top 10 1 01 and 001 are estimated by using the method of Moriguchi and Saez (2008

Appendix C3) We assume that a taxpayer at each threshold income has only wage income and forms

a household with a non-working spouse and two dependent children We compute the net taxable

income by subtracting exemptions and deductions based on the income tax law in the corresponding

years from the threshold income and use the tax schedule to obtain the MTRs The estimates of MTRs

are presented in Table B5

By using the MTR at each threshold income we can obtain the MTR for the average taxpayer of

each top income group To obtain the MTR of the average taxpayer in the top 01 group we take the

weighted average of the average taxpayers of the top 001 and the top 01-001

ltInsert Table A1 ~ Table A5gt

ltInsert Table B1 ~ Table B5gt

ltInsert Figure A1gt

13

Table A1 Adult Population Number of Taxpayers Income and CPI

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) Total income and average income are at constant 2010 prices

Total adult

population(a

ge 20 and

over)

Toal incomeAverage

incomeCPI

(thousands)Global

income tax

Wage

income tax

Global

income tax

Wage

income tax(billion won)

(thousand

won)(2010=100)

A B C BA CA D DA E

1933 11094 154 14 14107 1272 00000103

1934 11262 173 15 14280 1268 00000114

1935 11432 193 17 16170 1414 00000122

1936 11520 198 17 16051 1393 00000129

1937 11609 237 20 19104 1646 00000140

1938 11699 269 23 18743 1602 00000153

1939 11789 276 23 16491 1399 00000196

1940 11880 362 31 19782 1665 00000205

1941 11992 534 45 00000213

1942 12105 576 48 00000232

1976 17959 402 22 83236 4635 126

1977 18592 443 24 94564 5086 139

1978 19249 475 25 111224 5778 159

1979 19941 551 4889 28 245 119086 5972 189

1980 20653 589 5005 29 242 107503 5205 243

1981 21386 612 5888 29 275 111687 5222 295

1982 22109 714 6041 32 273 120347 5443 316

1983 22805 682 6595 30 289 131324 5759 326

1984 23475 748 7071 32 301 148740 6336 334

1985 24093 762 7124 32 296 161995 6724 342

1986 24702 855 35 185049 7491 352

1987 25325 662 26 209937 8290 362

1988 25962 704 27 233492 8993 388

1989 26637 637 24 256211 9618 410

1990 27454 740 27 283125 10313 445

1991 28140 828 29 318729 11327 487

1992 28818 934 32 344085 11940 517

1993 29464 1129 38 368007 12490 542

1994 30078 1256 42 404667 13454 576

1995 30659 1338 7198 44 235 447923 14610 602

1996 31168 1216 6958 39 223 486670 15614 632

1997 31689 1254 6944 40 219 498359 15727 660

1998 32134 1166 6269 36 195 477469 14859 709

1999 32645 1267 5520 39 169 487741 14941 715

2000 33738 1529 5934 45 176 512345 15186 731

2001 34401 1669 6447 49 187 519834 15111 761

2002 35021 1842 6188 53 177 534899 15274 782

2003 35598 1905 6258 54 176 543903 15279 809

2004 36072 1943 6268 54 174 559652 15515 838

2005 36437 2279 6107 63 168 579632 15908 861

2006 36961 2736 6621 74 179 601400 16271 881

2007 37425 3074 7749 82 207 619847 16562 903

2008 37971 3584 7981 94 210 616895 16247 945

2009 38440 3571 8541 93 222 617346 16060 971

2010 38946 3785 9244 97 237 638059 16383 1000

Number of taxpayers

(thousands)

Taxpayeradult

population ()

14

Table A2 Threshold Income of Top Income Groups

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1933 185136 74267 46849 16099 10574

1934 204486 74608 47750 15359 9576

1935 203989 75431 48587 15589 9686

1936 186339 71454 45799 14952 9290

1937 230471 89483 54298 16233 10076

1938 223658 84185 52474 16527 10425

1939 204640 71145 46085 13768 8762 2902

1940 244524 83155 54223 16849 10231 3383

1979 134528 76165 59973 32722 25451 12746 8620

1980 131681 71280 49722 30250 23515 12118 7681

1981 129168 69434 53369 28930 22590 11868 8458

1982 135663 70123 54625 31498 24662 13301 8728

1983 148668 80784 62378 34124 26454 14289 9013

1984 164008 83902 65254 35865 28537 14661 9276

1985 176154 83921 64847 36524 28729 15995 10274

1995 491648 203713 145270 78818 59355 37894 27176

1996 537942 235608 167108 87999 65729 45555 38402

1997 565959 246090 176106 92871 70157 46914 39543

1998 448465 192108 138262 78374 59922 42164 35935

1999 486342 224510 163549 89336 67751 44563 37462

2000 567539 228883 179544 100104 76304 48019 39997

2001 638609 255093 190016 103341 78355 48281 39660

2002 690605 274862 208094 96713 86720 50171 40455

2003 715838 282083 211466 97854 88245 50879 40844

2004 798205 307253 206042 114137 93132 53643 37672

2005 856008 321897 216150 110785 88853 49590 34004

2006 948605 361709 246695 123879 99602 62413 41989

2007 1070223 398680 268306 125248 96463 58170 38765

2008 1051085 399573 270898 125218 97522 57701 37631

2009 1022569 397032 270642 124348 96264 56430 36053

2010 1104380 423467 283886 135564 104948 57063 36201

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

13

Table A1 Adult Population Number of Taxpayers Income and CPI

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) Total income and average income are at constant 2010 prices

Total adult

population(a

ge 20 and

over)

Toal incomeAverage

incomeCPI

(thousands)Global

income tax

Wage

income tax

Global

income tax

Wage

income tax(billion won)

(thousand

won)(2010=100)

A B C BA CA D DA E

1933 11094 154 14 14107 1272 00000103

1934 11262 173 15 14280 1268 00000114

1935 11432 193 17 16170 1414 00000122

1936 11520 198 17 16051 1393 00000129

1937 11609 237 20 19104 1646 00000140

1938 11699 269 23 18743 1602 00000153

1939 11789 276 23 16491 1399 00000196

1940 11880 362 31 19782 1665 00000205

1941 11992 534 45 00000213

1942 12105 576 48 00000232

1976 17959 402 22 83236 4635 126

1977 18592 443 24 94564 5086 139

1978 19249 475 25 111224 5778 159

1979 19941 551 4889 28 245 119086 5972 189

1980 20653 589 5005 29 242 107503 5205 243

1981 21386 612 5888 29 275 111687 5222 295

1982 22109 714 6041 32 273 120347 5443 316

1983 22805 682 6595 30 289 131324 5759 326

1984 23475 748 7071 32 301 148740 6336 334

1985 24093 762 7124 32 296 161995 6724 342

1986 24702 855 35 185049 7491 352

1987 25325 662 26 209937 8290 362

1988 25962 704 27 233492 8993 388

1989 26637 637 24 256211 9618 410

1990 27454 740 27 283125 10313 445

1991 28140 828 29 318729 11327 487

1992 28818 934 32 344085 11940 517

1993 29464 1129 38 368007 12490 542

1994 30078 1256 42 404667 13454 576

1995 30659 1338 7198 44 235 447923 14610 602

1996 31168 1216 6958 39 223 486670 15614 632

1997 31689 1254 6944 40 219 498359 15727 660

1998 32134 1166 6269 36 195 477469 14859 709

1999 32645 1267 5520 39 169 487741 14941 715

2000 33738 1529 5934 45 176 512345 15186 731

2001 34401 1669 6447 49 187 519834 15111 761

2002 35021 1842 6188 53 177 534899 15274 782

2003 35598 1905 6258 54 176 543903 15279 809

2004 36072 1943 6268 54 174 559652 15515 838

2005 36437 2279 6107 63 168 579632 15908 861

2006 36961 2736 6621 74 179 601400 16271 881

2007 37425 3074 7749 82 207 619847 16562 903

2008 37971 3584 7981 94 210 616895 16247 945

2009 38440 3571 8541 93 222 617346 16060 971

2010 38946 3785 9244 97 237 638059 16383 1000

Number of taxpayers

(thousands)

Taxpayeradult

population ()

14

Table A2 Threshold Income of Top Income Groups

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1933 185136 74267 46849 16099 10574

1934 204486 74608 47750 15359 9576

1935 203989 75431 48587 15589 9686

1936 186339 71454 45799 14952 9290

1937 230471 89483 54298 16233 10076

1938 223658 84185 52474 16527 10425

1939 204640 71145 46085 13768 8762 2902

1940 244524 83155 54223 16849 10231 3383

1979 134528 76165 59973 32722 25451 12746 8620

1980 131681 71280 49722 30250 23515 12118 7681

1981 129168 69434 53369 28930 22590 11868 8458

1982 135663 70123 54625 31498 24662 13301 8728

1983 148668 80784 62378 34124 26454 14289 9013

1984 164008 83902 65254 35865 28537 14661 9276

1985 176154 83921 64847 36524 28729 15995 10274

1995 491648 203713 145270 78818 59355 37894 27176

1996 537942 235608 167108 87999 65729 45555 38402

1997 565959 246090 176106 92871 70157 46914 39543

1998 448465 192108 138262 78374 59922 42164 35935

1999 486342 224510 163549 89336 67751 44563 37462

2000 567539 228883 179544 100104 76304 48019 39997

2001 638609 255093 190016 103341 78355 48281 39660

2002 690605 274862 208094 96713 86720 50171 40455

2003 715838 282083 211466 97854 88245 50879 40844

2004 798205 307253 206042 114137 93132 53643 37672

2005 856008 321897 216150 110785 88853 49590 34004

2006 948605 361709 246695 123879 99602 62413 41989

2007 1070223 398680 268306 125248 96463 58170 38765

2008 1051085 399573 270898 125218 97522 57701 37631

2009 1022569 397032 270642 124348 96264 56430 36053

2010 1104380 423467 283886 135564 104948 57063 36201

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

14

Table A2 Threshold Income of Top Income Groups

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1933 185136 74267 46849 16099 10574

1934 204486 74608 47750 15359 9576

1935 203989 75431 48587 15589 9686

1936 186339 71454 45799 14952 9290

1937 230471 89483 54298 16233 10076

1938 223658 84185 52474 16527 10425

1939 204640 71145 46085 13768 8762 2902

1940 244524 83155 54223 16849 10231 3383

1979 134528 76165 59973 32722 25451 12746 8620

1980 131681 71280 49722 30250 23515 12118 7681

1981 129168 69434 53369 28930 22590 11868 8458

1982 135663 70123 54625 31498 24662 13301 8728

1983 148668 80784 62378 34124 26454 14289 9013

1984 164008 83902 65254 35865 28537 14661 9276

1985 176154 83921 64847 36524 28729 15995 10274

1995 491648 203713 145270 78818 59355 37894 27176

1996 537942 235608 167108 87999 65729 45555 38402

1997 565959 246090 176106 92871 70157 46914 39543

1998 448465 192108 138262 78374 59922 42164 35935

1999 486342 224510 163549 89336 67751 44563 37462

2000 567539 228883 179544 100104 76304 48019 39997

2001 638609 255093 190016 103341 78355 48281 39660

2002 690605 274862 208094 96713 86720 50171 40455

2003 715838 282083 211466 97854 88245 50879 40844

2004 798205 307253 206042 114137 93132 53643 37672

2005 856008 321897 216150 110785 88853 49590 34004

2006 948605 361709 246695 123879 99602 62413 41989

2007 1070223 398680 268306 125248 96463 58170 38765

2008 1051085 399573 270898 125218 97522 57701 37631

2009 1022569 397032 270642 124348 96264 56430 36053

2010 1104380 423467 283886 135564 104948 57063 36201

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

15

Table A3 Average Income of Top Income Groups

Note Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 359055 156610 106495 40912 26871

1934 355881 156563 105868 39632 25540

1935 359875 158179 107221 40527 26083

1936 345633 151223 102622 38906 25080

1937 385462 174275 116965 43171 27589

1938 480069 189942 124160 44661 28512

1939 405180 159368 105667 37695 24080 8387

1940 473861 187105 123566 44549 28346 9841

1979 512514 185821 122936 57197 42802 22290 16142

1980 372248 148377 103502 51511 38885 20587 14990

1981 311005 135555 98583 49158 37303 20148 14952

1982 290985 130921 96980 51531 39553 21825 16143

1983 268720 134996 102570 55748 42952 23594 17382

1984 349532 156217 114080 60333 46560 25081 18494

1985 428742 179165 128467 63844 48125 26082 19393

1995 972494 408145 286940 133403 100460 56029 42656

1996 1125617 468747 328597 151973 113513 60450 50959

1997 1147621 478519 337094 155989 117839 62271 52487

1998 834256 365999 261673 127911 97797 54803 46707

1999 1076139 444339 313043 148645 112730 59450 49977

2000 1289221 517487 359786 164556 125432 65219 54323

2001 1448958 578410 392336 172040 130443 67409 55373

2002 1628842 639704 427399 189920 141319 72768 58676

2003 1690471 661203 437792 193245 142369 74486 59795

2004 1909487 725481 486504 206998 151190 81909 61990

2005 2168816 818509 540215 222354 160152 82429 60734

2006 2322365 891250 590704 245067 177326 92969 69031

2007 2689905 1017467 667979 267359 188908 95588 71027

2008 2586567 992522 655960 264198 186925 94766 70471

2009 2516952 967646 642455 260802 184281 93091 69270

2010 2730837 1047121 693848 277615 195529 97134 71929

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

16

Table A4 Top Income Shares in Korea

Note 1) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

2) The income shares of the top 05-01 are the difference between the top 05 and 01 income

shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1933 282 616 837 1609 2113

1934 281 617 835 1563 2014

1935 254 559 758 1433 1844

1936 248 543 737 1396 1800

1937 234 530 711 1312 1677

1938 300 593 775 1394 1780

1939 290 570 755 1347 1721 2998

1940 285 562 742 1338 1702 2955

1979 086 156 206 479 717 1866 2703

1980 072 143 199 495 747 1978 2880

1981 060 130 189 471 714 1929 2863

1982 053 120 178 473 727 2005 2966

1983 047 117 178 484 746 2049 3018

1984 055 123 180 476 735 1979 2919

1985 064 133 191 475 716 1940 2884

1995 067 140 196 457 688 1918 2920

1996 072 150 210 487 727 1936 3264

1997 073 152 214 496 749 1980 3337

1998 056 123 176 430 658 1844 3143

1999 072 149 210 497 755 1990 3345

2000 085 170 237 542 826 2147 3577

2001 096 191 260 569 863 2230 3664

2002 107 209 280 622 925 2382 3842

2003 111 216 287 632 932 2438 3914

2004 123 234 314 667 974 2640 3996

2005 136 257 340 699 1007 2591 3818

2006 143 274 363 753 1090 2857 4243

2007 162 307 403 807 1141 2886 4288

2008 159 305 404 813 1151 2917 4338

2009 157 301 400 812 1147 2898 4313

2010 167 320 424 847 1193 2964 4390

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

17

Table A5 Top Income Composition

Note 1) The figures before liberation are not exactly the income shares of the top 1 They are income shares

of different top income groups from the top 14 in 1933 to the top 48 in 1942

2) A portion of interest is excluded in the estimation before liberation and taxpayers with financial

income below 40 million won are excluded after liberation

3) The top income composition for 1943-2006 cannot be estimated due to data limitations

4) Statistics are for all Korea(North and South combined) before liberation and for South Korea after

liberation

Unit

1933 301 351 307 17 24 2007 395 284 76 245

1934 268 358 335 17 23 2008 401 293 72 234

1935 256 369 336 16 24 2009 395 320 72 213

1936 269 394 285 14 38 2010 387 312 51 250

1937 249 391 305 13 42

1938 248 404 289 12 47 2007 425 306 69 199

1939 265 458 213 11 53 2008 417 322 66 195

1940 265 434 246 10 46 2009 411 344 67 178

1941 316 411 226 10 37 2010 409 335 47 209

1942 368 421 162 10 39

Business Income and Rents

2007 627 252 39 82 2007 831 128 15 27

2008 613 273 36 78 2008 835 130 12 23

2009 603 289 37 72 2009 829 137 13 21

2010 580 300 28 93 2010 826 140 09 25

Business Income

and Rents

top 01

top 10

top 1 top 005

Wage Income Business Income Rents Interest Dividends Wage Income Interest Dividends

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

18

Table B1 Number of Employment and Wage Income

Note 1) The number of taxpayers before 1972 is computed by dividing the sum of monthly tax units withheld at

source by 12

2) The number of taxpayers before 1974 includes those with wage income below the exemption point

Number of

EmploymentRatio()

Wage

Income

Average

Wage IncomeCPI

(thousands) Taxpayer Workers Below

Exemption Point

Daily

workers(billion won)

(thousand

won)(2010=100)

A B BA C CA D

1963 2383 653 6335 2659 21

1964 2363 797 6485 2744 27

1965 2609 965 7122 2730 30

1966 2780 1142 8452 3040 34

1967 3040 1517 10329 3398 37

1968 3400 1735 12038 3541 41

1969 3547 2650 14406 4061 46

1970 3746 2868 15725 4198 54

1971 3923 4026 17111 4362 61

1972 4005 3573 18626 4651 68

1973 4153 2616 21947 5285 70

1974 4444 2778 24281 5464 88

1975 4751 1226 258 26805 5642 110

1976 5140 1693 329 32556 6334 126

1977 5714 1732 303 39537 6919 139

1978 6242 1880 301 49210 7884 159

1979 6479 2435 376 55738 8603 189

1980 6464 2332 361 53500 8277 243

1981 6605 3086 467 54499 8251 295

1982 6839 2888 422 59379 8682 316

1983 7170 3239 452 69530 9697 326

1984 7631 3665 480 78057 10229 334

1985 8104 4042 499 84551 10433 342

1986 8433 95534 11329 352

1987 9191 110444 12016 362

1988 9610 125770 13087 388

1989 10390 141075 13578 410

1990 10950 158832 14505 445

1991 11699 179787 15368 487

1992 11910 193816 16273 517

1993 11944 209359 17528 542

1994 12479 229358 18379 576

1995 12899 7198 558 265286 20566 602

1996 13200 6958 527 289645 21943 632

1997 13404 6944 518 292255 21804 660

1998 12296 6269 510 259316 21089 709

1999 12663 5520 436 270860 21390 715

2000 13360 5934 444 297557 22272 731

2001 13659 6447 472 310938 22764 761

2002 14181 6188 436 333200 23496 782

2003 14402 6258 434 350132 24311 809

2004 14894 6268 421 368642 24751 838

2005 15185 6107 5796 402 380356 25048 861

2006 15551 6621 5974 426 392243 25223 881

2007 15970 7749 5628 485 406945 25482 903

2008 16206 7981 6065 7381 492 409760 25284 945

2009 16454 8541 5754 7559 519 415049 25225 971

2010 16971 9244 5932 7825 545 428282 25236 1000

Earners of Wage Income(thousands)

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

19

Table B2 Threshold Wage Income of Top Income Groups

Note P9999 denotes the threshold income of the top 001 income group

Unit Thousand won at constant 2010 prices

P9999 P9995 P999 P995 P99 P95 P90

1963 37721 27339 26643 13072 10365 7530 5638

1964 29202 21589 16522 11820 9981 5741 4743

1965 30524 21262 16905 11069 9671 5633 4708

1966 31984 21169 19308 11171 9618 6649 5187

1967 42673 26582 21873 11475 8564 7172 6119

1968 54303 23602 23543 15416 12610 8230 7324

1969 53520 30953 22783 16667 14346 9380 8214

1970 55936 35415 27849 19191 15795 9115 6952

1971 42934 30725 31128 19044 15479 9417 7195

1972 46307 28582 28884 18022 14552 9523 7726

1973 72502 42400 33653 19840 16715 9954 7895

1974 89806 52519 41684 21728 18002 11439 8536

1975 101130 59141 46941 27414 20317 10722 8390

1976 94015 54980 43638 25520 20957 11916 8999

1977 103857 61311 48734 31489 25967 13153 9643

1978 139858 81789 64916 40130 31578 18950 13741

1979 140040 51358 70444 42750 33566 19507 14077

1980 112666 65453 51802 37722 30617 18569 14209

1981 103481 72027 55962 36213 29887 17966 13587

1982 107680 77305 63450 39927 32000 19890 15314

1983 128567 83466 70094 42750 34569 20866 16704

1984 129055 81958 70719 43923 35058 21840 17066

1985 156401 96965 70974 46333 36662 22996 17549

1995 423720 170410 117344 83877 66166 47014 39418

1996 316124 169153 128275 93517 77552 50213 47372

1997 270530 164916 132888 97226 83288 58150 48986

1998 357529 171846 125984 90446 73569 45543 45948

1999 420592 223576 172356 104507 83972 50526 49823

2000 466582 244968 185445 100075 92747 56898 52456

2001 484007 230437 178611 91342 92907 57965 52440

2002 517274 251961 198779 106372 101703 64007 56227

2003 496453 249161 197987 108873 102701 66590 56732

2004 576654 275907 209691 126018 99478 69401 57780

2005 696220 306165 214859 121463 103150 68380 57542

2006 773525 339656 242554 145150 121575 79157 64459

2007 899780 359269 252737 141794 116432 71570 59710

2008 869648 370122 264132 115942 115522 71319 58833

2009 806972 361377 252355 115935 112152 69605 57515

2010 869824 384761 271865 128797 120464 73118 57606

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

20

Table B3 Average Wage Income of Top Income Groups

Unit Thousand won at constant 2010 prices

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 73115 38665 31496 19651 15581 10173 8236

1964 38095 26826 22196 14992 12788 7950 6531

1965 39306 27023 23146 14842 12587 8038 6576

1966 80445 38569 30083 17560 14031 9253 7505

1967 90282 43635 33894 19861 14822 8627 7685

1968 115965 53359 41186 22757 18381 11291 9557

1969 119931 55484 40839 24716 20034 12740 10747

1970 99151 54210 42629 26079 21583 13486 10213

1971 138629 60980 47425 27169 22083 13540 10773

1972 119650 55049 43952 26496 21605 13637 11064

1973 108754 63600 50479 29987 24027 14605 11655

1974 134709 78778 62526 38359 29537 16731 13326

1975 151696 88712 70411 48283 35784 18127 13753

1976 141022 82470 65457 38279 36303 19117 14642

1977 155786 91675 72870 44609 36532 21206 16106

1978 209787 122684 97374 59393 47236 27967 21677

1979 371725 136325 105503 61726 48325 29076 23059

1980 170049 98789 78186 53970 43805 26832 21404

1981 203417 113269 88005 55525 43901 26487 21131

1982 200786 108110 88734 58658 47011 28721 23097

1983 171859 111572 93696 61640 49844 30420 24675

1984 182155 104112 89835 65095 51956 31474 25213

1985 390953 176360 129086 69963 55360 33214 26445

1995 949131 383894 261307 127511 100586 63040 52855

1996 535486 281496 213469 128118 106245 68792 56087

1997 400762 239535 193016 125168 107224 74862 57834

1998 700867 325720 235516 128835 104794 64873 54386

1999 728820 371305 281394 152706 122699 73829 59112

2000 813099 409373 309902 164382 133179 81702 62889

2001 898146 427611 316524 158959 131432 82001 63758

2002 935270 455564 337449 176505 142785 89862 69053

2003 868443 435856 325778 175332 140533 91120 69939

2004 1019289 506795 358958 191278 150994 94346 78547

2005 1416708 626003 439313 209618 162488 97910 80360

2006 1531785 680066 476942 226153 173557 106892 85462

2007 2010649 820551 557274 247962 186166 106615 86275

2008 1789626 778509 540790 237382 184466 106068 85786

2009 1731113 749829 523615 232904 180176 103418 83713

2010 1723153 771841 544354 249109 187951 108342 86264

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

21

Table B4 Top Wage Income Shares in Korea

Note The income shares of the top 05-01 are the difference between the top 05 and 01 income shares

Unit

top 001 top 005 top 01 top 05 top 1 top 5 top 10

1963 028 073 118 370 586 1913 3098

1964 014 049 081 273 466 1448 2380

1965 014 049 085 272 461 1472 2409

1966 026 063 099 289 462 1522 2469

1967 027 064 100 292 436 1270 2262

1968 033 075 116 321 519 1594 2699

1969 030 068 101 304 493 1568 2646

1970 024 065 102 311 514 1606 2433

1971 032 070 109 311 506 1552 2470

1972 026 059 095 285 465 1466 2379

1973 021 060 096 284 455 1382 2205

1974 025 072 114 351 541 1531 2439

1975 027 079 125 428 634 1606 2438

1976 022 065 103 302 573 1509 2312

1977 023 066 105 322 528 1532 2328

1978 027 078 124 377 599 1774 2750

1979 043 079 123 359 562 1690 2680

1980 021 060 094 326 529 1621 2586

1981 025 069 107 336 532 1605 2561

1982 023 062 102 338 541 1654 2660

1983 018 058 097 318 514 1568 2545

1984 018 051 088 318 508 1538 2465

1985 037 085 124 335 531 1592 2535

1995 046 093 127 310 489 1533 2570

1996 024 064 097 292 484 1568 2556

1997 018 055 089 287 492 1717 2652

1998 033 077 112 305 497 1538 2579

1999 034 087 132 357 574 1726 2764

2000 037 092 139 369 598 1834 2824

2001 039 094 139 349 577 1801 2801

2002 040 097 144 376 608 1912 2939

2003 036 090 134 361 578 1874 2877

2004 041 102 145 386 610 1906 3173

2005 057 125 175 418 649 1954 3208

2006 061 135 189 448 688 2119 3388

2007 079 161 219 487 731 2092 3386

2008 071 154 214 469 730 2097 3393

2009 069 149 208 462 714 2050 3319

2010 068 153 216 494 745 2147 3418

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

22

Table B5 Marginal Tax Rates of Top Wage Income in Korea

Unit

Top MTR 001 01 1 5 10

1933 135 33 13 02

1934 270 80 25 04

1935 270 80 35 06

1936 270 80 35 06

1937 340 100 40 13

1938 340 120 55 13

1939 570 160 80 20 03

1940 570 160 100 20 03

1963 350 350 250 70 70 70

1964 350 350 150 150 70 70

1965 350 350 250 150 70 70

1966 350 350 250 150 70 70

1967 440 440 385 165 165 77

1968 550 550 550 220 132 132

1969 550 550 550 297 165 165

1970 550 550 374 154 121 99

1971 550 462 374 154 121 99

1972 480 480 320 150 120 90

1973 480 480 400 190 120 90

1974 480 480 480 320 190 150

1975 700 500 400 250 120 100

1976 700 500 400 300 150 100

1977 700 550 450 350 150 100

1978 700 550 450 350 180 120

1979 700 550 450 300 150 120

1980 700 550 450 300 180 150

1981 620 480 400 280 180 100

1982 620 480 400 280 150 100

1983 600 500 380 220 150 100

1984 550 470 350 210 120 100

1985 550 510 350 210 150 100

1995 450 450 360 270 270 180

1996 400 400 300 200 200 200

1997 400 400 300 300 200 200

1998 400 400 300 300 200 200

1999 400 400 400 300 200 200

2000 400 400 400 300 200 200

2001 400 400 400 300 200 200

2002 360 360 360 270 180 180

2003 360 360 360 270 180 180

2004 360 360 360 270 270 180

2005 360 360 360 270 270 180

2006 360 360 360 360 270 180

2007 360 360 360 360 270 180

2008 350 350 350 350 260 170

2009 350 350 350 350 240 150

2010 350 350 350 350 240 150

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05

23

FIG A1 Income Shares of Top Fractiles in Korea 1933-2010

(A) Top 1 and Next 4 Income Shares

(B) Decomposition of Top 1 Income Share

Source Table A4 in Appendix

Note 1) Top income shares are for all Korea(North and South combined) before liberation and for

South Korea after liberation

2) The top 5-1 denotes the income share of the top 5 excluding the top 1 The top 05-01

denotes the income share of the top 05 excluding the top 01 The top 1-05 denotes the

income share of the top 1 excluding the top 05

0

5

10

15

20

25

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 1

top 5-1

0

1

2

3

4

5

6

7

8

9

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

top 01

top 05-01

top 1-05