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The real Squid Game playing out in South Korea

Written by: Charmaine Gene


The shocking reality which plays out in South Korea's "Squid Game '' is a result of the jarring household debt crisis that plagues the lives of many South Koreans, leading to deadly consequences. The themes of Squid Game speak directly to South Korea's young generation — and the "get rich quick" schemes that they are embracing to combat the profound socio-economic malaise they face in a prosperous but increasingly unequal society. As job competition, unemployment, and housing prices soar, young South Koreans, resembling the Squid Game players, are opting for quicker paths to acquire wealth, even if they come with significant risks.

The Extent of the Household Debt Crisis

Figure 1: South Korea's Household Debt: % of GDP from April 2018 to October 2020

Source: CEIC Data

There are growing concerns regarding soaring real estate prices, an overheated stock market and worsening household debt in South Korea. Figure 1 shows that total household debt in South Korea in October 2020 was 106% of the country's GDP (CEIC Data, n.d.). GDP is a measure of the total value of all goods and services produced in a country; it is essentially a measure of the country's economic output. This means that the private debt of the country exceeds its GDP. In comparison, household debt in the United States is currently 78% of GDP, having peaked at 99.8% of GDP during the Great Recession (Winter et al., 2021). South Korea has the seventh-highest household debt to disposable income ratio among its member countries (Winter et al., 2021). After-tax income is measured by disposable income. The ratio of household debt to disposable income in South Korea is nearly double that of the United States. As a result, many South Koreans can relate to the characters' desperation in Squid Game. Even the characters' decisions to continue playing the game and putting themselves in an "escape debt or die" situation are reminiscent of real-life struggles in South Korea.

The real effects of household debt in the short and long run

An increase in the ratio of household debt is anticipated to promote economic development and employment in the short run. However, within three to five years, those impacts are reversed; development is slower than it would have been otherwise, and the likelihood of a financial crisis rises. Initially, households incur additional debt to purchase items such as new homes and automobiles. This provides a short-term boost to the economy as automakers and home builders hire additional personnel. However, in order to repay their loans, heavily indebted households may need to reduce their expenditure in the future. This has a negative impact on growth. As the 2008 financial crisis revealed, a quick economic shock, such as a drop in housing prices, can set off a chain reaction of credit defaults that rattles the foundations of the financial system.

An increase in household debt in relation to a country's GDP is a strong indicator of a faltering economy, particularly in the short to medium term. A rise in household debt, mostly caused by more freely available credit, is a useful predictor of a shrinking economy, as evidenced by the rise in household debt in the early to mid-2000s and the subsequent slowing of global GDP in the latter half of that decade. The provision of low-cost credit encourages borrowing to finance increased consumption. During household debt booms, household spending as a share of income grows, as do total imports and the share of consumption goods in total imports. The rise in household debt is accompanied by a dramatic slowdown in GDP, consumption, and investment growth.

Factors that contributed to the Household Debt severity

Credit card spending

Household debt is defined as the total debt owed by all members of a household including consumer debt and mortgage debts. Credit card spending accounts for nearly 40% of the country's GDP, compared to 18% in the US, and significantly contributes to the country's high household debt (Ng, 2020). This credit boom was encouraged by the 1997 Asian Financial Crisis, as the South Korean government supported the economy by pushing individuals to spend by granting tax incentives for credit card payments.


The number of employed persons fell by 980,000 in January 2020 to 25.82 million in 2021, marking the 11th straight year-on-year fall (Choi & Park, 2019). The decrease was the highest since a 1.28 million reduction in December 1998, following the 1997 financial crisis (Korea Herald, 2021). The labor market is wreaking the most havoc on young people. In January 2021, 310,000 jobs were lost among workers aged 15 to 29, owing to worsening conditions in industries that hire more young workers, such as restaurants and hospitality (Roh, 2021). Hiring among older workers, which had been holding up well, is suddenly looking unstable as well: the number of employed persons aged 60 and older fell by 15,000 in January 2021, compared to an increase of 250,000 in December 2020 (Organisation for Economic Co-operation and Development, 2011). When unemployment rates are high and steady, there are negative impacts on the long-run economic growth. Unemployment wastes resources, generates redistributive pressures and distortions, increases poverty, limits labor mobility, and promotes social unrest and conflict. In South Korea, the unemployment situation further exacerbates the issue of economic hardship.

Soaring house prices

Figure 2: Housing prices in South Korea over the last 10 years

Source: KB Financial Group

Apartment prices in Seoul have nearly doubled since President Moon Jae-in took office in 2017, despite at least 20 new policy initiatives and laws aimed at curbing growing prices. According to Figure 2, the average apartment price in the capital in 2020 was 1.1 billion won, up from 607 million won in 2017 (NewsBeezer, 2021). While the housing shortage is most acute in the capital, where prices are expected to rise another 13% in 2020, it is also being felt across the country, with apartment prices climbing 9.7% (Kyodo News, 2021). The biggest issue contributing to young people's discontent is most likely a shortage of affordable housing. Last year, the average monthly wage for a company was 3.5 million won while in comparison, apartment prices hovered around 1.1 billion won (Lee et al., 2021). Bank loans for this age group have also increased as young people incur more debt to purchase a home. In Korea, "yung-gul" refers to people who will go to any length, including selling their soul, to purchase a home. Despite the government's extensive efforts to make it more difficult to obtain loans, the surge has been supported by mortgages to buy or rent residences due to the out-of-reach pricing.

Consequences of Socioeconomic Inequality

"Dirt Spoon" Generation

The "spoon theory", according to which people born into wealthy families have gold spoons and those born into middle-class families have silver spoons, has long been accepted in South Korean society. More South Korean youth have identified as belonging to the "dirt spoon" generation, or the lower rung of society, in recent years. Moon rose to power in 2017 with the support of young people because his platform advocated for social and economic equality. Under South Korean President Moon Jae-in, the dirt spoon generation has grown more disillusioned. Moon was elected on a platform of social and economic fairness in 2017. Yet, halfway through his five-year term, he has made little progress in showing the country's youth, who have suffered the burden of rising inequality, that they are not forgotten. Instead, wealth disparities have worsened since Moon assumed office, with the top income group now earning 5.5 times that of the bottom, compared to 4.9 times before his election (Choi & Park, 2019).

‘Bittoo’: Borrowing to invest

Figure 3: Balance of margin loans by South Korean millennials from 2015 to 2020

Source: Bloomberg

The practice, known as "bittoo" in Korean, has resulted in prolonged, rapid growth in the value of assets. However, risky financial behavior has increased in tandem with the "dirt spoon generation's" desperation with the total outstanding balance of margin loans by Koreans in their 20s increasing from 100 billion won in 2015 to 700 billion won in 2020 to fuel speculative trading, as shown in Figure 3 (Bloomberg, 2020). Young South Koreans are going bankrupt in order to get ahead. The central bank's rate move may mark the end of Korean investors borrowing substantially to invest. Concerns in the stock market follow as South Korea's recent monetary and fiscal policies slow the country's spiraling household debt, which is projected to result in higher lending rates and a greater debt load. It has already resulted in an upsurge in lending as borrowers rushed to get loans before banks raised interest rates.

South Koreans in their twenties and thirties had a record 395 billion won in loans by the end of March 2021, a 14% increase from the same time last year (Lau, 2021). Those in their thirties are the most vulnerable, with debt equal to approximately 270% of their annual income. The increase in debt as South Koreans under the age of 40 now account for more than half of all household debt in the country, up from 35% two years ago (Lau, 2021).

And, like Seong, the protagonist of Squid Game, more young Koreans are turning to gambling, which was previously thought to be the domain of older Korean men. The majority of people in South Korea who have gambling addictions are now in their twenties and thirties, with online gambling (which is illegal in the country) being by far the most popular form of betting (Lau, 2021). Teenagers are also taking risks: The number of Korean teenagers seeking help for gambling addiction has more than 14-fold increased since 2015 (Lau, 2021).

The burden of overwhelming debt in South Korea

The government is concerned about young people's tendency to take risks and accumulate debt. The South Korean government introduced new loan restrictions in August 2021, aimed at reducing debt among young people. Millennials and those in their 30s had the highest debt-to-income ratios. However, as a result of the efforts to limit borrowing, some consumers have turned to higher-cost, higher-risk lenders. Many people are left at the mercy of debt collectors if their circumstances change and they fall behind on their payments.

While few people may end up in the hands of gangsters threatening to harvest their organs for sale, as depicted in Squid Game, the burden of overwhelming debt is a growing social issue – not to mention the leading cause of suicide in South Korea.


Bloomberg (2020). Millennials leverage Infographic.

CEIC Data. (n.d.). South Korea Household Debt: % of GDP Infographic.

Choi, H., & Park, J. (2019, November 27). Wider image: No money, no hope: South Korea's 'Dirt spoons' turn against Moon. Reuters.

Korea Herald. (2021, February 15). [Editorial] Worsening unemployment.

Kyodo News. (2021, June 22). FOCUS: Skyrocketing house prices leave many South Koreans struggling to buy.

Lau, Y. (2021, October 16). Squid Game’s ‘get rich quick’ theme has come to life in South Korea. Fortune.

Lee, J., Curran, E., & Lee, J. (2021, October 27). A Deep Dive Into Squid Game's World of Inequality. Bloomberg.

NewsBeezer (2021, April 6). Real estate fever broke out in Korea, people were borrowed on a massive scale to speculate and … houses were rented.

Ng, D. (2020, May 25) Rich, but household debt is growing: A time bomb for South Korea? CNA.

Organisation for Economic Co-operation and Development. (2011, June). A framework for growth and social cohesion in Korea.

Roh, J. (2021, September 15). S.Korea jobless rate hits record low as jobs for public sector, part-timers grow. Reuters.

Winter, E., Cody, T., & Datil, A. (2021, October 25). Yes, South Korea's debt crisis as depicted in squid game is real and contributes to a high suicide rate. abc10.

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