Investments in Education
The dramatic growth of the Korean economy has also contributed significantly to the value that Koreans place on higher education. In the past 25 years, the country has realized an extraordinarily high rate of return from education investment, hovering around 10 percent. As Dr. SooBong Uh, from the Korea University of Technology and Education has stated, “It is wiser for young people to invest their money in education than to keep it in the bank.”
Secondarily, there is a large and growing wage premium attached to obtaining a higher education in Korea. In 2007, for instance, college graduates earn up to 2.5 times more than their colleagues with a junior high school degree. With the rapid industrialization of the country, Korea’s labor market is highly segmented along educational background. As such, obtaining higher education is seen as essential to enter the primary labor market. Partially as a result of this relationship, in addition to the tradition of Confucianism, education is associated with positions of power and influence: graduates from ten major universities have almost three-fourths of the high-ranking government positions.
The government also shows a consistent commitment to investing in education: The Ministry of Education has a budget of US$29 billion, six times what it was in 1990. This accounts for about 20 percent of the central government expenditure. Koreans, as well, are willing to spend on education. The Korean government spends 3.4 percent of GDP on formal schooling; when taking private and informal schooling into account the amount nears 10 percent. Teachers are seen as a key part of that investment: OECD statistics place Korea 10th in rankings of entering teacher salaries. After fifteen years of service, Korean teachers move up to third place, demonstrating that the investment grows significantly over time.