Although households' average monthly income rose in the first quarter of this year, income distribution indicators were the worst in six years. The increase in earned income such as bonuses and incentives at large companies appears to have lifted income in the higher income brackets. In the lower income brackets, the share of "deficit households," whose consumption expenditure exceeds disposable income, rose sharply, pushing the overall deficit household ratio to the highest level in seven years.
◇ "wage gains at large companies"… gap widens between top and bottom households
According to the "first-quarter 2026 household trend survey results" released by the Ministry of Data and Statistics (MODS) on the 28th, average monthly income per household in the first quarter was 5,481,000 won, up 2.4% from a year earlier. This marks 11 consecutive quarters of growth since the third quarter of 2023. Earned, business, and transfer income all increased.
Non-consumption expenditure such as interest, insurance, and taxes averaged 1,137,000 won per month, up 1.2%. "Disposable income," which is total income minus non-consumption expenditure, averaged 4,344,000 won per month, up 2.7%.
Overall, households' finances appeared to improve, but there were differences by income bracket. The equivalized disposable income quintile ratio was 6.59 times, the highest in six years since the first quarter of 2020 (6.89 times). Equivalized disposable income adjusts actual disposable income for differences in household size, and the figure shows how many times the top 20% of households (quintile 5) exceed the bottom 20% (quintile 1).
The Ministry of Economy and Finance said this was "due to an increase in quintile-5 earned income, influenced by wage gains at enterprises with 300 or more employees."
The share of deficit households came in at 27.4%. That is the highest in seven years since the first quarter of 2019 (31.5%). This appears to reflect a rise in the deficit household ratio among lower-income households. The deficit household ratios in quintiles 1 and 2 were 62.5% and 30.1%, respectively, also the highest since the first quarter of 2019. By contrast, in quintiles 3 and 5, the ratios were at their highest in 10 quarters and 7 quarters, respectively, while in quintile 4, the share decreased.
◇ consumption expenditure growth outpaces income… U.S.-Iran war fallout lifts transportation costs
Meanwhile, among expenditures, consumption expenditure averaged 3,105,000 won per household per month. That was up 5.3% from a year earlier. It was the largest increase in three years since the first quarter of 2023 (11.5%). It was also the first time in seven quarters that the consumption expenditure growth rate (5.3%) exceeded the income growth rate (2.4%).
Notably, the "transportation" category (12.1%) saw the biggest rise. A MODS official said, "Spending on car purchases increased significantly," adding, "Given the rise in fuel expenditure for transport equipment, the U.S.-Iran war fallout likely played a part." Spending also rose sharply in health (10.4%), food and lodging (5.1%), and recreation and culture (12%).
The surplus, which is disposable income minus consumption expenditure, averaged 1,239,000 won per month, down 3.1% from a year earlier. The surplus ratio, which is the surplus as a share of disposable income, fell 1.7 percentage points to 28.5%. The average propensity to consume rose 1.7 percentage points to 71.5%.