Does Inequality Stifle Human Capital Accumulation?

Abstract

Using evidence on elite presence, land inequality, literacy, and primary schooling in pre-colonial, colonial, and South Korea, I show that inequality may help or check human capital accumulation depending on the nature of inequality and the type of learning. Little affected by the imposition of Japanese rule, structural inequality based on pre-colonial social order stifled literacy in colonial Korea. Fostered by the economic growth under Japanese rule, market-driven inequality promoted literacy. Both types of inequality checked primary schooling, except that traditional elites financially supported new schools. The post-colonial demise of land tenancy advanced literacy more by destroying the pre-colonial social order than by improving income inequality.