BOK warns wealth, income gaps widen as young Koreans lose ground

The spread of artificial intelligence could deepen income gaps, the report said. AI combined with robotics could replace jobs held by low-income workers and young people early in their careers. A BOK survey found that people in lower income brackets were more likely to believe their jobs could be replaced by AI.

The impact of dual polarization is most visible among young people. The share of people in their 20s and 30s among households in the bottom quintile for both net wealth and income rose from 7.9% in 2020 to 15.2% in 2025. The report said this suggests young people without homes are being pushed into lower economic groups.

The BOK researchers warned that dual polarization could weaken productivity and consumer vitality. An analysis of 120 countries found that when the share of wealth held by the top 10% rises by 1 percentage point, total factor productivity falls by 0.16% two years later.

In South Korea, the share of net wealth held by the top 10% increased from 43.0% in 2022 to 46.1% in 2025, up 3.1 percentage points. The researchers said widening wealth inequality could become a constraint on economic growth and productivity improvement.

Social costs could also rise. The report said widening gaps may lower expectations for upward mobility, weaken work incentives and reduce social trust. High housing costs for young people could become a barrier to marriage and childbirth.

The researchers said redistribution policies focused mainly on income support are not enough. South Korea needs to guide household assets, now heavily concentrated in real estate, toward more productive sectors and expand opportunities to build productive assets, they said.

The report also called for a more stable tax base in response to economic changes driven by technological development. Institutions should be reviewed to ensure the path from labor income to asset formation does not deteriorate further. The researchers said South Korea must strengthen new growth industries so the benefits of economic growth spread more widely.