It rapid industrialisation since the 1960s has substantially raised living standards.
Yet research has shown that a large proportion of the population have experienced poverty recently.
In a report just published, one quarter of Korean households failed to earn more than the minimum cost of living, putting them in a category defined as "absolute poverty" in Korea.
Correspondent: Karon Snowdon
Speaker: Dr Kang Shin-wook, head of social security research, South Korea Institute for Health and Social Affairs
SNOWDON: The just published report the Korea Institute for Health and Social Affairs surveyed almost 6 thousand households between 2005 and 2009. It found 25 percent or one in four suffered absolute poverty over that five year period. Many people since, lost their jobs or had wages cut due to the contraction of the global financial crisis. And although that doesn't mean living on just a few dollars a day, it means families, the elderly and widowed and divorced women are doing it hard.
Dr Kang Shin-wook is a department head at the Institute.
KANG: We could say a household is in absolute poverty when its income is less than the minimum cost of living.
SNOWDON: In 2009, the monthly minimum cost of living for a four person household was 1.3 million won a month ... or one-thousand Australian dollars a month or roughly 250 dollars a week on today's conversion rate. Dr Kang says the situation would be worse now than when he did his study and he notes Korea's poverty rate is among the highest in the OECD.
KANG: In particular, the poverty rate of the aged, is the highest among them. Korea's redistribution policy does not seem to work well to mitigate poverty. For example, the National Pension System has short history and the take-up ratio is just 27 percent. And the labour market condition was not good for years. Though unemployment rate was not that high, the earnings of low-wage labour and self-employed, have stagnated compared to those of high income classes.
SNOWDON: In 2006, it was estimated the wealthiest ten per cent of Korea's population held a quarter of its wealth. Economic growth is set to slow this year, average household debt is higher than most incomes and economic inequality is getting worse.
Half of Korea's workforce is irregular, that means workers without a contract and they earn 57 percent of the average regular wage and are easily fired. Women are paid less and hired less often than men.
Dr Kang Shin Wook says the social security system especially for those in most need reaches only 5 percent of all households, and needs to be expanded.
KANG: The main focus of that program is to secure a minimum standard of living for those of very limited means. To reduce and prevent poverty, the program should be able to cover more people and to provide some of them, not necessarily cash assistance, but in-kind benefits in medical care, housing and education.
SNOWDON: If the economy gets worse, if economic growth slows down, poverty in Korea is likely to get worse, is it?
KANG: Yes I think so.