Changes in North Korean Household Income in the Kim Jung-eun Era and Their Policy Implications

Abstract

Since Kim Jong-un took power, North Korea has greatly increased the opportunities for informal income generation, expansion of trade with China, and growth of manufacturing industries. As a result, it is known that most of the household income comes from the informal sector. The consumer goods market, service market, private finance market, and housing market expanded, and in the process, a labor market was formed and opportunities to obtain informal income expanded. The development of the market did not just increase ‘consumption’, but also increased ‘production’ and ‘income’ of individuals at the same time. It created various forms of earning money and jobs, and as the labor market became more flexible, various income classes appeared. Most North Korean households are getting out of absolute poverty and are increasing their income and assets based on their own economic activities. Therefore, the target and contents of inter-Korean exchange and cooperation projects that meet the North Korean people’s rising expectations are required, and micro-support policies that take into account the gaps caused by stratification are required. The core of future inter-Korean exchanges and cooperation should be planned and promoted from a long-term and macroscopic perspective, such as comprehensive development of North Korea’s underdeveloped regions and improvement of North Korea's human capital, beyond simple humanitarian aid.