Private Tutoring and Demand for Education in South Korea

Abstract

Private tutoring in South Korea is quite pervasive. In 2006, the household sector spent 2.57% of the nation’s GDP on private tutoring for primary and secondary school students. Government spending on those students was about 3.5% of GDP, which is about the average level among OECD countries. Despite the substantial government expenditure on the formal education system and strong policies that try to reduce private tutoring activities, household spending on private tutoring has been increasing very rapidly. We argue that the prevalence of private tutoring is a market response to the government’s rigid and uniform education policy. The desire to enter elite universities in a very hierarchical higher education system and a heavily regulated and equalized secondary school system has created an enormous demand for supplementary private tutoring. Empirical analyses indicate that students with high academic ability and high family income whose parents are highly educated spend more on private tutoring. Also, students in regions without school choice spend more on private tutoring. The estimated income elasticity of private tutoring is about 0.5. Pervasive private tutoring may create an inefficient as well as inequitable educational system. Korean experience studied in this article suggests that private tutoring should be studied as an integral part of the whole educational system.