Optimal levels of private tutoring investment in South Korea

Abstract

During the past several decades, South Korea has transformed itself into an international educational powerhouse. The rapid economic and social achievements have largely been attributed to intentional government-regulated education plans and policies. However, since the 1960s, a powerful parallel for-profit private tutoring sector (hagwons) has emerged with significant effect on families. The main aim of this study is twofold: to model how Korean households decide on the level of investment in private tutoring and to explore whether the current amounts of such investment seem optimal across various income levels, an issue which, to date, has received scant attention in the research literature. This exploratory investigation takes the form of a two-period life-cycle model that provides a framework in which to discuss household private tutoring investment decisions.