The UN report, The Price is Right, is based on interviews carried out with 214 defectors in 2017 and 2018. It said that everyday survival in North Korea "is further hampered by officials demanding bribes".
Pyongyang rejected the report as being "politically motivated for sinister purposes", the BBC reported.
According to the report, the collapse of the state-run distribution system in the 1990s forced an estimated three-quarters of the population to turn to informal markets as everyday rations were no longer enough to survive.
"If you just follow instructions coming from the state, you starve to death," one of the defectors said.
But the markets exist in a legal grey area, which leaves people vulnerable to officials wanting bribes.
Those who try to earn money this way "face arrest and detention", the UN report said, adding that women wanting to earn money are particularly vulnerable.
The UN report also criticized the economic management of the country under Kim, who has ruled since his father's death in 2011.
North Korea blames its economic woes on sanctions, which were imposed over its nuclear weapons programmes.
But, the report said that the military still receives priority funding over ensuring people have enough food.
The World Food Programme estimates that 10.1 million people are now suffering from severe food shortages, while the worst harvest in a decade has left the country short of more than a million tonnes of food.
"I am concerned that the constant focus on the nuclear issue continues to divert attention from the terrible state of human rights for many millions of North Koreans," said UN's High Commissioner for Human Rights Michelle Bachelet.
"The rights to food, health, shelter, work, freedom of movement and liberty are universal and inalienable, but in North Korea they depend primarily on the ability of individuals to bribe state officials," she added.
( With inputs from IANS )