Farm Household Income Mobility and Its Determinants

Abstract

This study examined income mobility of farm household and investigated the determinants of the income mobility in Korea. For the analysis this study used Farm Household Economy Survey (2003-2020), which is surveyed by Statistics Korea, and employed transition matrix and probit specification. According to empirical results, the income mobility of farm household in Korea had been weaken for the time periods. The probability of upward and downward income mobility had been decreased; however, the probability of staying same income quintile had been increased. In particular, the tendency of remaining same income quintile became stronger around 2013. Next, we found that many farm household-related variables have positive effects on upward income mobility, which is similar to the previous studyies. However, we found stronger association between public transer income and upward income mobility of farm household in the high-income quintile rather than low-income quintile. The empirical results imply that government policy for farmhouse income should be targeted on the low-income farm household for improving income distribution and mobility.