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«Jisoon Lee School of Economics Seoul National University Copyright © 2002 The International Bank for Reconstruction and Development/The World Bank ...»

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Education Policy in the Republic of Korea:

Building Block or Stumbling Block?

Jisoon Lee

School of Economics

Seoul National University

Copyright © 2002

The International Bank for Reconstruction

and Development/The World Bank

1818 H Street, N.W.

Washington, D.C. 20433, U.S.A.

The World Bank enjoys copyright under protocol 2 of the Universal Copyright Convention. This

material may nonetheless be copied for research, educational, or scholarly purposes only in the member countries of The World Bank. Material in this series is subject to revision. The findings, interpretations, and conclusions expressed in this document are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or the members of its Board of Executive Directors or the countries they represent.

Education Policy in the Republic of Korea: Building Block or Stumbling Block?

Jisoon Lee

2001. 27 pages. Stock No. 37164


The Characteristics of Korean Education

Exploring Whether the Heavy Educational Investment Has Made Any Difference........ 10 Grading Korean Education: Is Everything “Fine”?

Proposals for Educational Reform

Lessons and Conclusions


8 Education Policy in the Republic of Korea: Building Block or Stumbling Block?∗ Jisoon Lee School of Economics Seoul National University The Republic of Korea has experienced remarkably rapid and persistent economic growth in the last 40 years. Thanks to this the country was able to transform itself from an extremely poor rural economy into a bustling middle-income industrial (and service) economy. The transformation is especially noteworthy in that it was accompanied by improvement in social equity. How were the two able to take place simultaneously? It would be difficult to answer this question without a discussion of the role of human capital investment in high and equitable economic growth.

Investment in human capital has always been a top priority for Koreans. Thus even in the dire circumstances of the Korean War, the government and families never gave up on educating children.

Likewise during the 1950s when the country was still in turmoil after the war’s devastation, and during the 1960s when it was struggling to overcome the vicious circle of poverty, Korea kept on investing in human capital. This attitude toward education has never shown any tendency to weaken in recent years.

Educational emphases have also gradually shifted from the elementary to secondary school–level, and to tertiary education. The result is an elementary school enrollment ratio of 100 percent, a secondary school enrollment ratio of over 90 percent, and a 61 percent enrollment ratio for tertiary schools in 1996.

Public and private sectors together have played important roles in education. In the earlier period (the 1950s and 1960s) the public sector played a more active role. As the average income level rose, though, the private sector gradually assumed a more prominent role. The public sector has played an especially important role in elementary and secondary education. It has been running most of the elementary schools, and likewise more than two-thirds of the secondary schools are public. In addition to this, the government has set up and operated at least one teachers’ college in every province to produce elementary school teachers at a greatly subsidized cost to students. For secondary school teachers, public universities played important roles in earlier periods, though private universities have become equally important in recent years. The government has had a dual role in tertiary education: It has extensively regulated all aspects of higher education in return for substantial financial support for universities and colleges, more than 70 percent of which are private institutions. The government spends about 4 percent of the gross domestic product (GDP) on education.

As mentioned above, the private sector has also played an active role in education. In elementary and secondary education, it has had a dual role. In terms of formal schooling, its role has been in a supporting capacity. In terms of postschool education, however, the private sector has been the major player. Parents provide their kids with tutors and supplementary educational materials, and send them to preparatory ∗ Prepared for Social Development in East Asia, a research project of the Brain Trust Program at the World Bank Institute (WDI)/World Bank. I would like to thank the WDI/World Bank Workshop participants for their helpful comments and suggestions on earlier versions of this paper.

2 Jisoon Lee schools. Altogether the private sector spends about 7 percent of the GDP for education. This means that parents with school-age children spend close to 25 percent of their income on education.

There are indications that private- and public-sector educational efforts have been complementary and productive. Their joint efforts have undoubtedly contributed to improvements in productivity, and thus toward more rapid economic growth. As the opportunity for education has been given equally to all citizens regardless of sex, age, or regional background, education has contributed to a reduction in social inequality and an increase in upward mobility.

After more than 40 years of heavy investment in human capital, the over-eager attitude of Koreans toward education shows no signs of abatement. On the contrary, the country now seems to be overinvesting in education. In recent years the combined educational expenditure by public and private sectors has never fallen below 10 percent of the GDP. Some of this spending appears to be a wasting of resources. For instance, even with prolonged heavy investment domestically, the “importation” of education has been increasing rapidly in recent years; many parents now routinely send their children abroad for all levels of education. This is a far cry from the practice (that prevailed until the mid-1980s) in which more than 95 percent of those who went abroad for study were college graduates. In modern times Korea has always been a small-deficit country in educational trade, which makes this recent rapid deficit increase more striking.

These observations suggest a series of interesting issues. How and why has Korea invested so much in human capital formation? Have these investments been effective after all? How have they been implemented and delivered? Were they instrumental in achieving rapid and equitable economic growth?

Was the investment a form of social insurance? If so, what factors have contributed to its success? Has everything been fine with education in Korea? If there are missteps, how can we possibly correct them?

Can we learn useful lessons from the Korean experience?

This paper, composed of six sections including this introduction, attempts to provide answers to these questions. In this vein I will first take a look at the overall picture of education in the next section. Then in the third section I am going to investigate how much educational investment has contributed to economic and social development. In the fourth section, I will examine the current status of the education industry to determine whether “everything is fine” with Korean education. (We will see that there are quite a few problems.) Then in the fifth section, I will discuss several proposals for education reform. I regard those proposals as minimal measures to alleviate the problems identified in the preceding section. In the final section, I will conclude the paper by drawing lessons from the Korean experience.

The Characteristics of Korean Education We will start this section with an overall look at the system, move on to an exploration of attitudes toward education, and finally examine the country’s expenditure on education.

A Bird’s Eye View of the Education System

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vocational colleges. For graduate studies, in addition to regular graduate programs, there are various professional schools.

Figure 1. The Korean School System Source: Compiled from the Korean Ministry of Education web page (www.


Most nursery schools and kindergartens are private. They charge competitive prices and offer quality programs. Since there are choices, parents have few complaints about these preschools and kindergartens.

Most elementary schools are public. Public elementary schools do not charge tuition. Students usually attend a neighborhood school. Apart from the fact that classes tend to be crowded, parents do not have many complaints about elementary schools. One complaint they do have is that sometimes they have to 4 Jisoon Lee bribe teachers with gifts and under-the-table money. However, this complaint loses its justification to some extent, since parents have an option, admittedly somewhat limited, to send their kids to private schools. Private elementary schools charge market prices in return for better-quality education. Those who send their kids to public schools tend to supplement their children’s education with several extracurricular classes. About 30 percent of those parents also hire private tutors to give their children a head start in college-bound competition.

Most middle schools are public, too. Students are assigned to a neighborhood school. The management of the middle schools is entirely in the hands of school administrators and teachers. Parents’ involvement in school affairs is minimal. In many cases they just pay tuition, which is set by the government at a relatively low level. However, the parents’ role at home becomes stronger once their kid enters middle school. They feel that middle school education is grossly inadequate. To supplement this perceived deficiency, they hire tutors for one or two subjects, send their children to preparatory schools, or they themselves become tutors for their kids. A few exceptional students do finish a middle school on their own without getting outside academic help. In all cases, parents spend a large portion of their income on supplementary educational materials.

There are a fair number of private high schools. However, these schools are not true private schools, since there is no room for competition among them. All high schools, whether they are public or private, charge the same tuition and offer the same curriculum, set by the government. No high school has control over admissions, either. Students are assigned randomly by a computer. Thus a student becomes a private school attendee, if a computer happens to assign her to a private school. Then why are there private schools? They exist because of their history. These schools used to be genuinely private. They could choose their students, offer diverse curricula once core course requirements were fulfilled, and charge a competitive tuition. This has been no longer true since the mid-1970s when such academic freedom was curtailed.

The two restrictions mentioned here—that schools and students cannot choose one another, and that private high schools cannot behave as truly private entities—have serious implications for high school education in Korea.

High schools are not in good shape. Parents’ trust in and expectations of them are rather low. In a sense they send their children to high school for the acquirement of a diploma, which is needed for college admission. Perhaps they also send their kids to high schools because it is difficult for them to handle older teens all day at home. Other than that a high school does not offer much. The teachers have extremely low morale. They do not expect much, either. They know that better students are already learning outside the school what they have to learn at school. The poor ones that are left are in any case problematic and difficult to teach. All of this makes teachers shirk their duties; besides, better teachers save their energy for private tutoring. Most high school students then acquire knowledge from private tutors, in preparatory schools, and through self-education. A rough estimate of how much a student learns in and out of school would be 30 percent and 70 percent, respectively.

This sorry state of secondary education is a fundamental deficiency of Korean education. Unless Korea can correct the problem in the near future, further development is bound to be difficult. There have been attempts to redress the problem. However, these attempts have been rather halfhearted. For example, a few special schools have been created, with the right to select students through a competitive process.

Likewise in some mid-size municipalities a few high schools (we may call them “free schools”) have gone back to the old system of selecting students through entrance exams. The free schools have naturally become much better than the others. Equally naturally the competition to enter a free school has become extremely fierce. However, the number of free schools is too small to change the state of Korean secondary education.

The poor state of Korean high schools forces parents to spend a lot on private lessons and supplementary educational materials. Table 1, which summarizes information on private educational spending, shows that in 1994 parents’ contribution toward education was 22.6 trillion Won (7.5 percent of 5 Education Policy in the Republic of Korea the GDP). Again this is in stark contrast to governmental education spending of 3.8 percent of the GDP in

1994. In-school and out-of-school expenses each claim about a half of private educational expenditure.

This means that parents in Korea now take the responsibility of financing about a half of total in-school expenses. The out-of-school expenses can be further divided into expenses on private lessons and other expenses. The former is responsible for about 21 percent of total private educational expenses. This amounts to about 1.5 percent of the GDP.

Table 1. Private Education Expenditure (Billion Won, percent)

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