South Korea’s education success falters in evolving economy

SOUTH KOREA’s education system, a key driver of the nation’s economic success, is facing increased criticism ranging from failing to meet the demands of a modern labor market to contributing to worsening mental health among the young.

Korea has the highest share of college graduates in the developed world and its citizens’ educational zeal has been praised by US President Joseph R. Biden. The current system helped the nation rise from the ashes of war in the early 1950s to become a manufacturing powerhouse.

But a deeper inspection of the education sector highlights an obsession with “glamor” colleges at the expense of real-world skills, a lack of ongoing learning to remain competitive and an industry of cram schools that are blamed for rising teenage suicides.

Korea receives the lowest labor productivity return from education spending in the Organization for Economic Co-operation and Development (OECD). It spends 40% more on a typical teenage student than Ireland yet obtains 60% less in gross domestic product per employee.

The bulk of Korean spending on education goes to hagwons, businesses that instruct children on preparing for tests and exams via intensive coaching. These tutoring firms have swelled into a 23.4 trillion won ($17 billion) industry by promising better exam results.

Hagwons for college admission normally charge hundreds of dollars a month. Enrollment begins early, with one English-teaching hagwon for kindergarten-age kids costing $25,000 a year, five times the average tuition fee of a college, according to lawmaker Min Hyung-bae.

Korean students are regularly ranked among the world’s best, but soon after they join the workforce, their cognitive abilities begin to slide at the fastest pace in the OECD.

Researchers cite a dearth of ongoing training, as well as a lack of competition and autonomy, among reasons workers are unable to maintain their edge.

Korea has the worst mismatch between labor-market needs and job skills in the developed world, with half of the nation’s university graduates ending up in roles that have little to do with their degrees.

Part of the reason is Koreans’ “golden ticket syndrome” that prioritizes entry to a prestigious university over attending a school that would help develop their lifelong passion and career, an OECD report found.

Nearly two-thirds of Korean firms say the skills they seek actually have little to do with whether an applicant is a college graduate, according to Day1Company, an online campus operator. Korea is the only OECD member where the correlation between course taken in tertiary education and employment is essentially zero.

Yet rising numbers of vocational students believe their next step must be attending college rather than joining the workforce. That likely worsens the training-job mismatch and erodes productivity. Those same students blame a culture that unfairly favors college graduates in both promotion and pay.

The share of vocational students is already low, at 18% last year, compared with an OECD average of 44%, according to Kim Tai-gi, a labor economist.

Yet attending college doesn’t guarantee social mobility. The chances of moving up the social ladder have been on the decline as the share of college graduates has risen, surveys show.

An obsession with college has fueled the cost of cram schools and private tutoring, meaning many couples simply can’t afford this extra education, making them reluctant to have children if they can’t provide them with the best opportunities.

Korea last year shattered its own record for the world’s lowest fertility rate and its population is projected to halve by the end of the century.

Stress over college entrance is a leading cause of teenage suicide, and also tends to correlate with the number of hours students spend at hagwons. Last year, the suicide rate jumped by 10.1% among teenagers, the biggest increase among all generations.

Policy makers are increasingly aware of the problems in the education system, but reforms have made little progress.

“Korea is caught in a trap of its own success,” said Ban Ga-Woon, an economist at the Korea Research Institute for Vocational Education & Training. “Education has played a crucial role in bringing the nation this far, but may now be sabotaging its economic future.” — Bloomberg