Does college level the playing field? Socioeconomic gaps in the earnings of similar graduates: evidence from South Korea

Sangwoo Lee,Anna Vignoles

doi:10.1007/s10734-021-00745-0

Abstract

The socioeconomic gap in participation at university is an enduring policy issue in South Korea, as in many other countries. However, less attention has been paid to the socioeconomic gap in the outcomes from tertiary education. This paper addresses this gap in the literature, using the Korean Education and Employment Panel (KEEP) data to investigate the extent to which the wages of Korean graduates who attended similar higher education institutions vary by socioeconomic background. The results show that a degree appears to largely level the playing field, in terms of earnings, between male graduates from poor and rich backgrounds. For females, by contrast, family background is still a strong predictor of earnings, even after allowing for institution attended and discipline of degree. Further, the wage premium for 2-year and 4-year college degrees also varies by family background. Four-year college degrees, contrary to popular belief, do not always attract a higher wage premium than 2-year college degrees, particularly for men from poorer family backgrounds.

Highlights

Education has been highly valued in the Republic of Korea
Much research and policy attention has been paid to the socioeconomic gap in university participation in South Korea, far less attention has been paid to the extent to which family background continues to impact graduates’ earnings
Using the Korean Education and Employment Panel (KEEP) survey, provided by the Korea Research Institute for Vocational Education and Training (KRIVET), this paper addresses the following research questions: (a) is there a socioeconomic gap in the earnings of otherwise similar graduates? (b) How does the wage premium from different college types vary by individuals’ socioeconomic background? (c) Given that South Korea has the largest gender wage gap among the OECD countries and the experiences of male and female graduates in the labour market are quite different, how does the impact of socioeconomic background on graduates’ earnings vary by gender?

Summary

Introduction

Education has been highly valued in the Republic of Korea (hereafter South Korea). Participation in higher education is high, and approximately 70% of high school students in South Korea go to university (OECD, 2016). In South Korea, educational achievement and access to different types of higher education vary substantially by level of household income and/or assets, with fewer students from poorer backgrounds attending prestigious 4-year institutions (Choi & Min, 2015; Jang, 1999). An important policy question in South Korea is whether higher education does level the playing field, in terms of reducing or eliminating the disparity in earnings between individuals from high- and low-socioeconomic status backgrounds. Much research and policy attention has been paid to the socioeconomic gap in university participation in South Korea, far less attention has been paid to the extent to which family background continues to impact graduates’ earnings

Methods

Findings

Discussion

Conclusion