A recent report from the Bank of Korea highlights a growing disparity between the capital region (the metropolitan area) and non-capital regions, which is adversely affecting intergenerational economic mobility. The report points out that the inherited economic status, measured in income and asset inequality, has intensified in South Korea, with the income gradient rising from 0.11 among children of parents born between 1971 and 1980 to 0.32 for those born between 1981 and 1990. Additionally, the asset gradient also increased from 0.28 to 0.42 within the same timeframe.

The widening gap is evident in the per capita income data, which shows an increase in the income difference between the metropolitan area and non-capital regions from 3.2 million won in 2005 to 5.5 million won in 2023. While real estate prices in metropolitan areas continued to rise, non-capital regions saw a decline in property prices. Given that children tend to reside near their parents, the economic differences between metropolitan and non-capital regions will likely lead to increasing disparities in economic capability among children born in these areas. The report also emphasizes that while children tend to improve their economic situations when moving to another region, the effects differ significantly based on whether they migrate to the capital or remain in non-capital areas.

Furthermore, the report warns that declining intergenerational mobility could lead to societal fragmentation and hinder economic growth. It notes the troubling trend of the youth increasingly concentrating in metropolitan regions and warns that this not only perpetuates wealth transmission among affluent families but exacerbates regional inequalities, potentially resulting in depopulation and decline in non-capital areas. To combat these issues, the report advocates for balanced development initiatives to address these disparities.