Seoul (AsiaNews) – The cut-throat race for school places, fuelled in no small part by hagwon – private tuition centres that prepare children from a very young age for entrance exams to the best universities – is contributing to the fall in birth rates. This is compounded by the desire to establish oneself professionally before even considering starting a family.
A new study on South Korean society is showing that success in education and work emerges as a key factor in the process that has pushed the country to the bottom of global rankings on demographic decline. It is a problem that the first tentative recovery in birth rates recorded over the last two years – against a backdrop of social alarm over an ageing society – certainly cannot resolve on its own.
The study has found that parents tend to increase spending on private education as they compare their children’s academic results with those of other families. And the resulting financial burden, in turn, discourages families from having more children. Researchers have estimated that, without the effects of such competition, the average number of children per woman could rise by 28 per cent.
The findings were presented a few days ago at a conference on population ageing organised jointly by the Bank of Korea, the Centre for Economic Policy Research and the Organisation for Economic Co-operation and Development. The research team, which included Kim Sung-eun, a lecturer in economics at Sejong University, and Mincheol Yeom, a lecturer at Virginia Commonwealth University in the United States, examined the relationship between competition in the private education sector and fertility.
The researchers defined the phenomenon as ‘status competition’, in which parents compare and evaluate their children’s academic performance against that of other children and increase their investment in education.
In Korea, this often translates into additional expenditure, particularly on enrolment in hagwon – private tuition centres that supplement state education – as parents fear their children may fall behind their peers. A comparison across different countries has shown that those with fiercer competition tend to have lower birth rates and a more rapid decline in fertility. In this context, South Korea and Singapore were cited as representative examples.
The burden arising from competition in the private education sector was found to be particularly significant for low-income households. In fact, those in the lowest income quintile spent, on average, 8.4 per cent of their income on private education, compared with 5.1 per cent for higher-income households.
The study also identified a spillover effect, whereby high-income households’ spending on private education influences the spending decisions of other groups. If spending on private education by households in the top 15 per cent of the income distribution were to fall by 10 per cent, the proportion of income that households in the bottom 50 per cent spend on private education would decrease by between 0.4 and 0.9 percentage points.
The researchers explained that when high-income households increase their investment in education, even the most disadvantaged households are forced to increase their meagre resources for education, for fear that their children will fall behind on the social ladder.
In particular, the study found that competition has a substantial effect on decisions regarding childbearing: the researchers estimated that, in the absence of competition, women born between 1970 and 1975 would have had an average of 2.45 children, compared with 1.92 in their model. This would represent an increase of around 28 per cent.
Hence the researchers’ call for policymakers to consider measures aimed at reducing competition in the private education sector, rather than merely boosting incentives for childbirth. The researchers explain that taxing expenditure on private education by high-income households – which serve as a benchmark for others – and using the revenue to fund childbirth incentives could increase fertility and social wellbeing, without placing a further burden on public finances.
Finally, a second study examined the impact of having a child on women’s income. According to Hwang Ji-soo, a professor at Seoul National University, five years after giving birth, women’s income was 43 per cent lower than that of women without children, and the decline began as early as during pregnancy, rather than after childbirth. In contrast, the study found little change in men’s income following the birth of a child.
