Exploring the Non-Linear Impact of Information and Communication Technology, Globalization, and Geopolitical Risks on Poverty in South Korea

Abstract

Purpose

This study examines the asymmetric and nonlinear impacts of information and communication technology (ICT), globalization, and geopolitical risk on poverty and household vulnerability in South Korea from 1990 to 2024. Against the backdrop of the Miracle on the Han River, the analysis examines how these factors interact with structural inequality, labor market polarization, demographic pressures, and external shocks within a developed Asian economy.

Methodology

Annual time-series data were utilized, with poverty measured through relative poverty rates and household deficit indicators. Broadband subscription rates serve as a proxy for ICT, the KOF Globalization Index measures globalization, and the Caldara-Iacoviello GPR Index quantifies geopolitical factors. A regression specification that includes labor market structure and external-sector or variables. The study employs the Non-Linear Autoregressive Distributed Lag (NARDL) model, which enables the estimation of divergent long- and short-run impacts of positive and negative shocks for each independent variable.

Findings

Empirical evidence indicates that positive shocks to ICT and globalization yield heterogeneous effects, with high-skill sectors and an intensifying labor market dual. Conversely, negative shocks, particularly increases in geopolitical risk, exacerbate poverty through heightened energy price volatility and trade disruptions. These effects are amplified by South Korea's significant energy dependence and vulnerability to global supply chain disturbances.

Conclusion

The identified non-linear dynamics underscore the urgency of inclusive policy design. Reducing poverty in an uncertain international context necessitates pro-poor diffusion of ICT, equitable approaches to globalization, and strategies to mitigate geopolitical risk. These include strengthening social safety nets, reforming small and medium-enterprise wage structures, implementing re-employment initiatives, and stabilizing energy supplies.