Permanent Delegation of the Republic of Korea to the Organisation for Economic Co-operation and Development (OECD)

Inclusive Growth

The OECD Inclusive Growth Initiative was launched in 2012 as a response to the rise in global inequality. Despite the recovery from the economic crisis of 2007-08, inequalities have widened in terms of income, wealth and opportunities. Today, the average income of the wealthiest 10% of the population is around ten times that of the poorest 10% across the OECD member countries, up from seven times since the 1980s.

The OECD recognizes that economic growth will not be a sufficient condition for increasing standards of living, unless the benefits of growth are fairly distributed. In addition, it is highlighted that non-income dimensions, such as health and educational status, can influence the well-being of the population more than income. The OECD considers Inclusive Growth as “economic growth that creates opportunities for all groups of the population and distributes the benefits of increased prosperity, both in monetary and non-monetary terms, fairly across society.”

Building upon many years’ work of the OECD on inequalities, well-being and structural policies, the preliminary phase of the OECD Inclusive Growth Initiative developed a multidimensional approach to Inclusive Growth. The report on the OECD Framework for Inclusive Growth (2014) advances the notion of a measure of multidimensional living standards (MDLS) which accounts for income and non-income dimensions, and offers policymakers an analytical tool to assess the effect of structural policies on different social groups. A flagship publication, All on Board: Making Inclusive Growth Happen> (2015), discusses win-win policies to deliver stronger growth and greater inclusiveness in various areas such as macroeconomic policies, labor-market policies,, and skills.

OECD member countries have also consistently emphasized the importance of making economic growth more inclusive in the Ministerial Council Meeting (MCM) Statements. The “Update on Inclusive Growth Project” from the MCM 2015 provides insights and direction for members to deliver better policies for inclusive growth. The MCM 2016 was held with the central theme of “Enhancing Productivity Growth for Inclusive Growth.” Moreover, the report on the Productivity-Inclusiveness Nexus, delivered at the MCM 2016, provides policy recommendations based on the evidence-based analysis on the main factors behind slowing productivity gains and rising inequality, as well as possible links between these two trends.

At the request of the MCM 2017, the OECD Secretariat developed the Framework for Policy Action on Inclusive Growth (2018) to help governments fully incorporate equity in policymaking as a driver of growth and productivity. The OECD has also developed a dashboard of 24 inclusive-growth indicators to monitor progress over time around key outcomes and drivers of inclusive growth. The indicators are categorised by (1) Growth and ensuring equitable sharing of benefits from growth, (2) Inclusive and well-functioning markets, (3) Equal opportunities and foundation of future prosperity and (4) Governments. As core indicators, GDP per capita growth, median income growth and level, life expectancy, relative poverty rate, female wage gap, regional life expectancy gap and voter turnout are included in the relevant categories. Currently, the OECD is piloting the Inclusive Growth Country Reviews to guide countries on better designing and implementing the inclusive-growth policy framework, the first of which was "OECD Inclusive Growth Review of Korea : Creating Opportunities for All (Feb 2021)". With a close cooperation with Korea Development Institute, the publication reviewed the progress of Korea's Inclusive Growth and suggested comprehensive policy recommendations on the future of Work and Skills as well as Doing Business in Korea. The OECD will continue mainstreaming the work on inclusive growth across the organization and provide relevant policy recommendations.