This study attempts to analyze and determine the correlation between household income level and the level of household educational investment by surveying household investments in education in Korea today.
Education is one of the major factors that affect income distribution. How much an individual or their parents invest in learning can significantly influence the income earned later life. Educational investment contributes to forming the human capital of any society, and therefore decisively shapes how income is distributed in that society. Income distribution can be understood on two levels: functional distribution of income and personal or size distribution of income. Other income-determining factors include cultural background, personality traits, and interpersonal relationships. These factors not only influence how much an individual earns, but also their chances for upward social mobility. Education shapes an individual’s worldview and determines their earning power. As investment in education can significantly affect future earnings, Koreans will continue to invest increasingly in their, and their children’s, education.
The education-income correlation was not particularly decisive until the late 1960s, but Koreans continued to invest in higher education for themselves and their children. By 1967, the proportion of the Korean population with middle-school education or higher had risen from 12.0 percent to 20 percent. The number of Koreans with high-school education and college education also increased by a margin between five percent and 15.5 percent. From the mid-1960s to the mid-1970s, the share of educational investment in the spending by residents of cities and rural areas increased from 4.8 percent to 7.2 percent, and from 4.7 percent to 7.4 percent, respectively. Koreans in general increase their educational investment by KRW 20,000 to KRW 35,000 each year, spending KRW 45,000 to KRW 100,000 more on high-school education.
The average income earned by highly educated Koreans (college education or above) has increased from KRW 436,800 to KRW 852,000. These figures indicate that educational investment has not yet ensured the stability of income distribution among Koreans. The income level is also significantly affected by other factors, such as the earner’s age and seniority at their workplace. Educational investment therefore may not be the only, or even the most powerful, determinant of income.
교육투자의 소득분배 효과(Income-distributing effect of educational investment)
|Journal Title; Vol./Issue||한국개발연구:vol. 1(no. 2)|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Macroeconomics
Social Development < Education
|Holding||KDI; KDI School|