Korea suffers from surfeit of college degreesKorea has the world’s highest college entrance rate, but it is actually stunting Korea’s economic potential.
In 2011, 72.5 percent of high school graduates went onto college, but the correlation between the entrance rate and human capital growth rate fell to 0.86 percent, dropping from its peak of 0.96 percent in 1991.
Had about 42 percent of the graduates bypassed college to start working immediately after high school, the GDP growth rate would have been as much as 1.01 percentage points higher.
The opportunity costs (tuition plus forgone income) for four-year university graduates are 119.6 million won, and 53.6 million won for two-year college graduates. Given the weak job market for the annual deluge of new university graduates, the financial return on higher education can be questioned.
Over-education is due to a national presumption that a university degree is imperative for a person’s social status, recognition and wealth. This narrow definition of success pushes non-university degree holders to the fringes of the job market. Skilled technicians and craftsmen were called the pillars of our society during the era of double-digit economic growth. Now they are not properly respected or paid.
People without a tertiary education are stuck in low paying technical, services and sales jobs with little security.
In 2011, the employment rate of young people with only high school degrees was 59.1 percent. Among total high school graduate workers, only 47.4 percent hold salaried positions.
As a result, even people best suited for technically skilled jobs right after high school feel compelled to pursue a university degree, though the tuition is a heavy financial burden.
That, in turn, exacerbates the nation’s large household debt level and feeds the vicious circle of too many overeducated young people chasing too few desirable jobs. Some of those who don’t get hired end up taking lower-paying jobs that they could have gotten without college degress.
To end this vicious cycle, young people with a high school degree should be given ways to succeed without going to college.
It is necessary to develop jobs that prioritize skills rather than degrees and to broaden the scope of jobs for skilled workers, including in R&D, software development and engineering.
Large companies are starting to move in this direction. It will also be necessary to given incentives to high school graduates to get jobs in the six base industries that are the cornerstones of Korea’s competitiveness, which are currently dominated by people in their 40s and 50s.
Second, cooperation with businesses in educational programs is crucial for high school graduates to employ their skills immediately. The curriculum needs to be upgraded to produce high school graduates with exceptional potential. Investments and budgets must be secured for specialized vocational high schools, which focus on technical education and apprenticeships.
It will be necessary for companies to identify jobs that high school graduates can fill. To this end, recruitment criteria should be based on skills that directly relate to specific jobs in order to enhance a high school graduate’s chance of being hired.
Companies also will need to provide high school graduates equal opportunities to advance. This would include compensation according to jobs, promotions based on performance and skills, equal chances for competence development and job mobility to switch to another field.
Finally, the role of education needs to be redefined. Role models such as CEOs without a university degree should be described to high school students. Parents’ appreciation of their children’s special talents and aptitude could help instill a healthier attitude about career choices for their children.
by Kim Jae-won and Ryu Ji-seong