Can you really have too much of a good thing? This is the question concerning education officials in South Korea. The education ministry is witnessing an unprecedented number of students matriculating at Korean universities. The Bloomberg Business Week article “Korea Tries to Curb Its High Achievers” indicates the source of this influx; historically, South Korean parents have put a great deal of emphasis on their children’s’ educations. This often materializes in the form of pricy private schooling and after-hours tutors for students. Not surprisingly, the large private education industry in South Korea has responded to the relentless demand for education with high and rising prices. Demand for education, however, is outstripping the demand for the educated. Officials are also concerned that mounting levels of debt (used to finance education via private schools, cram schools, and tutoring) stifles consumption.
Based on principles of growth theory, I find the concern about declining consumption (due to education debt) shortsighted. Education serves economic participants in obvious ways: the educated command higher wages and have a greater horizon of options. What’s more, education serves as one of the biggest engines of economic growth. Short-term consumption patterns, while important, must be considered in a framework that also accounts for the effects of education on mid and long-term economic growth. English scholar Thomas Malthus, argued in his 1798 essay on population growth that the expansion of the population would decrease living standards as a growing population would be constrained by a fixed supply of resources. What he overlooked two centuries ago, is similar to what officials in South Korea are overlooking now – and that is the capacity of people to innovate, be it more people in the workforce in terms of sheer numbers or equivalently more educated and productive workers.
Human interest groups have realized just this. In attempt to reduce instances of poverty world over the UN developed goals specifically targeting the rate of primary school students enrolled in primary schools. This is just one instance of an international policy that reflects the convergence of economic thought on the role of education in enhancing economic outlook. In a recent education poll by UN member NGO NJ MED, South Korea won the title of the world’s best educated country out of 200 countries considered. For more on this please see the article “South Korea Crowned the World’s Best Educated Country in NGOs Global Rankings” on forimmediaterelease.net. South Korea’s problem might best be described as growing pains.
Alternatively, comparing South Korea to countries in Southern Asia and Sub-Saharan Africa who fare poorly on measures of wellbeing, economic and otherwise, may be an instructive exercise. While these regions have vast differences in economic and social structure, educational attainment has not been prioritized in the way that it has been in South Korea. No doubt the correlation between economic growth is evidenced in a comparison of these regions.