EXPLORATION OF THE RELATIONSHIP BETWEEN EDUCATION AND ECONOMIC INEQUALITY IN KOREA A DISSERTATION SUBMITTED TO THE FACULTY OF THE UNIVERSITY OF MINNESOTA BY Hyunjun Kim IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTORATE OF PHILOSOPHY Dr. Nicola Alexander, Advisor July 2019 Copyright © 2019 Hyunjun Kim i Dedication I dedicate my dissertation to my wife, Hye Yoon Park who has believed in me and supported me every day with her love. I also dedicate this dissertation to my parents, who have made me think about Korean education systems critically and supported me throughout the process. I also dedicate this work to my committee members, Dr. David Chapman, Dr. Karen Seashore, Dr. Ernest Davenport Jr., and Dr. Nicola Alexander who have always encouraged me to write this dissertation from the very beginning of it. I give special thanks to my advisor, Dr. Nicola Alexander. With her inspirations and kind support, I was able to finish this journey. ii ABSTRACT Many politicians and policymakers have called upon the Korean education system to improve economic equality and social mobility by promoting equal educational opportunities for every student. However, the impact and source of inequality are different for different subsets of the population. Thus, it is necessary to analyze different subsets differently. The purpose of this paper is to understand the relationships among education, social mobility, and inequality in different subsets of the population over time in Korea. These relationships are essential to understand the capacity of education to improve economic equality and social mobility. The findings from this study can help to inform policymakers on how they can design education policy to enhance both income equality and social mobility. Four questions guide this study: (1) How, if at all, is education associated with economic inequality in Korea? (2) How, if at all, is education associated with social mobility in Korea? (3) How, if at all, are the generational cohorts different from each other in terms of the association between education and social mobility? And (4) How, if at all, is using the absolute measure of education on social mobility different from using the relative measure of education in the analysis of social mobility? I relied on the Korean Welfare Panel Study data 2007-2017 and employed various statistical techniques to estimate the relationships among key variables. I used the Origin- Education-Destination (OED) framework for analyses, which is widely used by social mobility researchers. I calculated the inequality, inter-generational, and intra-generational social mobility for the total sample of the population in Korea. I measured inequality using a variety of inequality measures such as the Gini coefficient, Palma ratio, and iii Wolfson index. I used structural equation modeling methods to estimate inter- generational social mobility and ordinal logit regression methods to estimate intra- generational social mobility. I analyzed the population sample and the five generational cohorts in Korea separately. I also used ordinal logit regression to conduct an intra- generational social mobility analysis between 2007 and 2017. I ran similar but separate models for each of the five generational cohorts in Korea. I examined these constructs using both measures of wealth and income and compared these findings. Further, I analyzed the data using both absolute (status) values of education and relative values of education and explored if these different measures yielded different results. Five significant findings emerged. First, I found that there is no consistent relationship between economic equality and social mobility. Second, in inter-generational social mobility, education is a pathway to the reproduction of parents' socio-economic status. All models show there are no significant direct effects between origin and destination. This pattern emerged whether I used absolute or relative measures of education. Third, education was more closely associated with income mobility than wealth mobility. Fourth, the rate of return on capital was relatively low, and the source of wealth inequality was mainly tied to the unequal wealth distribution in real-estate assets, particularly buildings. Fifth, Korean economic inequality is located primarily between the median and the bottom 10 %. In sum, the relationships between education, social mobility, and inequality differ by social context. The role of education can be social equalizer only if certain conditions are met. iv Table of Contents List of Tables ……………………………………………………………………………v List of Figures………………………………………………………………………...…vii Chapter 1: INTRODUCTION .................................................................................................. 1 Chapter 2: LITERATURE REVIEW...................................................................................... 5 ECONOMIC INEQUALITY ....................................................................................................... 5 SOCIAL MOBILITY THROUGH EDUCATION .................................................................... 10 CAUSES OF ECONOMIC INEQUALITY .............................................................................. 14 POLICY DISCOURSE ON ECONOMIC INEQUALITY AND EDUCATION ...................... 25 HISTORY OF KOREAN EDUCATIONAL EXPANSION AND ECONOMIC INEQUALITY ................................................................................................................................................... 29 SUMMARY AND RESEARCH QUESTIONS ........................................................................ 33 Chapter 3: METHODOLOGY .............................................................................................. 35 DATA AND SAMPLE .............................................................................................................. 35 MEASUREMENTS ................................................................................................................... 37 Educational Attainment and Economic Status ....................................................................... 37 Parents’ Socio-Economic Status ............................................................................................ 40 Inequality Measures ............................................................................................................... 41 Social Mobility Measures ...................................................................................................... 43 ANALYTICAL MODEL........................................................................................................... 45 Descriptive Analysis and Inequality Analysis ....................................................................... 45 Structural Equation Modeling: Inter-generational Social Mobility ....................................... 46 Ordinal Logit Regression: Intra-generational Social Mobility .............................................. 49 Chapter 4: INEQUALITY ANALYSIS RESULTS ............................................................. 52 DESCRIPTIVE ANALYSIS OF ORIGIN ................................................................................ 52 DESCRIPTIVE ANALYSIS OF EDUCATION ....................................................................... 54 DESCRIPTIVE ANALYSIS OF DESTINATION .................................................................... 57 INEQUALITY ANALYSIS ...................................................................................................... 65 Summary .................................................................................................................................... 73 v Chapter 5: SOCIAL MOBILITY ANALYSIS RESULTS .................................................. 74 INTER-GENERATIONAL SOCIAL MOBILITY RESULTS ................................................. 74 Absolute and Relative Measure of Education ........................................................................ 75 Inter-generational Social Mobility by Cohort ........................................................................ 77 Income Mobility vs. Wealth Mobility.................................................................................... 81 Comparing Social Mobility between 2007 and 2017 ............................................................. 83 INTRA-GENERATIONAL SOCIAL MOBILITY RESULTS ................................................. 87 Total Sample Intra-Generational Social Mobility .................................................................. 88 Intra-Generational Social Mobility by Cohort ....................................................................... 93 CHAPTER SUMMARY ............................................................................................................ 95 Chapter 6: DISCUSSION ....................................................................................................... 97 SUMMARY ............................................................................................................................... 97 FUTURE AVENUES OF RESEARCH .................................................................................. 102 References……………………………………………………………………….…..…104 vi List of Tables Table 2.1 Political and economic events and education policy change in South Korea after the independence..................................................................................................................... 32 Table 3.1 Cohorts of this research ...............................................................................................