Education bubble and widening inequality

Goldin and Katz (2008) called the twentieth century the era of American human capital and argued that the U.S. economic dominance in the twentieth century was possible because the U.S. surpassed Europe in terms of education. Similarly, the second half of the twentieth century was an era of Korea’s triumph in terms of human capital accumulation, which was recognized by the Nobel Laureate economist Robert Lucas (1993) and also by the former U.S. President Barack Obama. Korea’s successful educational development has been praised not only by such global leading figures but also by various international communities and developing countries. During this period, Korea transformed itself from a poor and aid-dependent nation to a donor country providing development assistance to others. This was possible in large part by the human capital accumulation through the rapid expansion of education (Kim, K-H., 2013). For the last half century, Korea showed the fastest educational expansion in the world and reached the world’s top level in terms of average years of schooling, performance in international academic achievement tests, and number of researchers per population. Yet Korea still faces quality problems in higher education that is not apparent in quantitative indicators. For example, Korean research universities have yet to reach the world’s top level in terms of research impacts; colleges are vertically differentiated based on admission test scores, and the horizontal differentiation through specialization and industry–academia cooperation are still weak. Korean primary and secondary schools place strong emphasis on cognitive skills that are measurable through test scores, and their test score performance of those skills are in fact superb. However, the emphasis on measurable cognitive skills in Korean schools seems excessive, lacking sophisticated evaluation criteria and supporting conditions for developing students’ creative thinking, character skills, and effective on-the-job social skills.