Socioeconomic Polarization and Personal Well-Being under Neoliberal Restructuring: Implications of South Korea after the 1997 Asian Financial Crisis.

Abstract

Over the last three decades, the world has witnessed another fundamental institutional shift in the history of capitalist development. In the wake of the series of economic crises in the 1970s, the so-called neoliberalism and socioeconomic restructuring based on its tenets arose as a solution to the problems of stagflation and quickly spread across the globe thanks to its ideational and practical appeals. South Korea has not been an exception to the worldwide current of the neoliberal globalization and pursued the neoliberal restructuring since the early 1980s, but particularly actively after the 1997 Asian Financial Crisis. As a consequence of the comprehensive neoliberal structural adjustment based on free-market mechanisms, however, South Korea has experienced a substantial increase in inequality, poverty, and insecurity over the last decade or so. Against this context, I examine both the material and subjective aspects of personal well-being in order to seek the implications of the post-crisis neoliberal restructuring for the general welfare of the Korean society in particular, and other neoliberal countries in general. In the first substantive chapter, the association between education and rising earnings inequality in post-crisis South Korea is studied to measure how much of the increase in the post-crisis earnings inequality is due to diverging earnings returns to education. Second, the relationship between family wealth and household consumption is examined over the course of economic crisis and recovery in post-crisis South Korea, and I further investigate if possession of family wealth has a buffering effect on the level of household consumption over economic crisis. Lastly, the association between marital status and the level of life satisfaction is studied at the time of economic crisis as well as during the subsequent period of economic recovery. By examining the subjective aspect of personal well-being in relation to marital status in post- crisis South Korea, I evaluate if the “marriage premium” still holds positive even in the period of severe economic hardships. Based on these theoretical and empirical observations, I discuss in the concluding section a more viable form of capitalist development for the twenty-first century than the current neoliberal mode of globalization.