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The Race for Elite Destinations: Education Competition and Low Fertility in Korea

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  • Dongwoo Kim

Abstract

South Korea has the world's lowest fertility and an intense education race. Families devote nine percent of lifetime income to education, mostly to private tutoring with near-zero measured returns. I show that competition for coveted careers generates an assignment externality: when all families spend more, the admission bar rises and children become costly. In a quantitative model calibrated to this mechanism, replacing score-based assignment with a capacity-preserving lottery raises completed fertility by 0.24 children per couple. Pronatal transfers deliver one eighth of that increase. Education taxes deliver almost none. Preference shifts, not a fiercer race, explain the decline across cohorts.

Suggested Citation

  • Dongwoo Kim, 2026. "The Race for Elite Destinations: Education Competition and Low Fertility in Korea," Papers 2608.27980, arXiv.org.
    • Handle: RePEc:arx:papers:2608.27980
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