Education policy in South Korea: A contemporary model of human capital accumulation?

Figures & data

Figure 1. The market for education.

Notes: The diagram shows the quantity of education provided under different scenarios: Q#1 depicts the market outcome assuming no government intervention; Q#2 depicts the socially optimal outcome, assuming appropriate government intervention; Q#3 depicts a situation of overinvestment in education.

Figure 2. Cost–benefit analysis for human capital investment.

Notes: The diagram shows the human capital approach for a representative household/student. The representative student incurs both explicit and implicit costs during education, while additional benefits, in the form of higher earnings, results from such education.

Figure 3. Expected outcomes from educational investment.

Note: The diagram shows the decision tree facing a representative household/student.

Table 1. Changing costs and probabilities

As more households choose to send their children to private after-school tutoring programs …
Costs of private after-school programs increase	C ↑
Probability of acceptance into prestigious university falls	P1 ↓
Probability of employment at large corporation falls	P2 ↓
As the economy and labor market change …
Probability of employment at large corporation falls	P2 ↓ P3 ↓

Note: The table indicates how household choices and labor markets influence the cost and probability of educational and employment success.

Figure 4. Coordination failures in educational markets (multiple equilibria).

Notes: The diagram shows that a representative household’s investment in private tutoring depends on the choices made by other households. The rational decision function depicts that households have an incentive to overinvest (equilibrium B) in private tutoring expenditures, if other households invest heavily in private tutoring.