Human Capital

Chapter 5


The Escape from Oppression and Poverty: a Developmental History of Korea

Income and education levels tend to be positively associated across countries and over time, an observation, which led a prominent economist to wonder “are we looking here at the effect of education on economic growth, or vice versa?” (Easterlin(1981: 7)) As in much of the rest of the world, the twentieth century saw living standards and educational attainment in Korea improve in parallel. Having been set off by the port opening in 1876 and set on track by the initiative taken by the colonial government, the progress in literacy and primary schooling speeded up significantly in the decade following the decolonization in 1945, when incomes hardly improved.

These facts suggest that the Korean human capital accumulation neither caused nor was caused by economic growth. Instead, they appear to indicate that the shifts in the distribution of power and resources drove both educational progress and economic development. Indeed, in the middle of the growth miracle McGinn, et al.(1980: 240) concluded that “The evidence is not consistent with a conclusion that education generated growth … It does seem likely that changes occurring in other sectors of the Korean society occurred also in education”. Consistent with Engerman and Sokoloff(2000)’s account of the divergence occurring between North and Latin America in terms of land and power inequality impinging on public provision of mass schooling and growth, this inference needs to be balanced by the divergent interpretations of the South Korean growth miracle highlighting education as one of key driving forces and by the abundance of evidence of income growth promoting schooling in the rest of the world.

This chapter takes a close look at the interaction between human capital accumulation and economic growth and between public provision of education and private demand for learning, focusing on the rise of literacy and primary schooling up to 1960 and leaving the subsequent propagation of secondary education to be discussed the following chapter. We begin by presenting the aggregates outlining the course of the Korean human capital accumulation. The second and third section analyze the literacy improvement and the advance of primary school, respectively, in the decades leading up to 1945. We then discuss how the de-colonization helped literacy and primary education surge in South Korea. The final section concludes by highlighting that the rapid accumulation of the Korean human capital took place against the background of the transition from a limited to an open access order.

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