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  • Posts Tagged ‘hagwon’

    The Extreme Economics of South Korea’s “English Fever”: Why the Numbers Don’t Add Up

    November 14th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    How much should a person pay, as a non-native speaker, to master the English language?
    For some, it would be a rational calculation, dispassionately weighing the potential costs and benefits associated with learning the English language. But arguably for the vast majority of South Koreans, the process would be the antithesis of dispassionate—an extremely passionate process in which the only economic limit would be primarily based on how much the particular person (or very likely, the person’s family) could afford for such education. This has led to an entire industry or micro-economy in South Korea that is often beneficial for producers (an elaborate and vast array of private education institutes, known as hagwon), yet often not so beneficial to the very target group that is seeking such knowledge and language capabilities—South Korea’s students.
    Currently, over 17,000 hagwons exist that teach English and related educational services exist in South Korea today. That’s roughly one hagwon for every 3,000 people nationwide (not just those of student age). Even more, the annualized growth rate of the hagwon industry from 2005 to 2009 was an astonishing 20.5%. Such explosive growth has economically incentivized even more hagwons to enter into the private education sector–with some being more qualified than others. In the same period, the total sales of English language hagwons increased annually by 26.1%. Sales per hagwon also increased by 230 million won from 190 million won.
    On the consumer side, in 2012 alone, the total expenditures on private education was approximately 19 trillion (not billion) won. Of this figure, the vast majority of such funding was spent for elementary school level private education (7.8 trillion won), followed by middle school private education (6.1 trillion won), and then high school education (5.2 trillion won). In total, the average monthly cost of private education for every student in the country is approximately 236,000 won per student every month (for elementary, middle and high school students combined)—that adds up to nearly 3 million won per year, in an economy with a GDP per capita of 22,590,000 million won. Such figures do not even include private education figures at the university and post-graduate level, as well as for various professional certificate and other professional training institutes, which would drive up the figures appreciably higher.
    With so much spending based on South Korea’s notorious “English fever” (a colloquial term denoting the nation’s obsession with learning the English language for academic and professional reasons), surely there must be a nice payoff to show for it.
    Unfortunately, although this may have been the financial case for many (but not all) in the hagwon industry, it has not been the case for the hagwon’s client-students. In a recent survey of 60 countries worldwide by EF Education First’s English Proficiency Index, South Korea ranked 24th, a mere two spots ahead of Japan (26th) and just a few more spots ahead of China (34th). This, in effect, ranks South Korea as a mid-tier English speaking country, which often prides itself on its English proficiency relative to other Asian countries. However, according to the survey, it was precisely other Asian countries, such as China and Vietnam, which made the most advancement in their English capabilities.
    South Korea’s test-taking numbers, at least on paper, are often exceptional. But paper test-taking metrics (used to survey a large group in a time and resource-constrained environment like a country’s student population) generally only measure the “theory” of a discipline—namely grammatical rules and vocabulary resuscitation test-taking capabilities–which often fails to accurately measure the “actual application” of the discipline in the real world. In part, this is based on the country-wide working practice of a top-down “teaching to the test” pedagogical approach–whereby rote memorization often represents the dominant teaching medium.
    This is in part due to the nation’s fixation on standardized tests like the TOEFL and TOEIC, which are too often needed and used as an important filtering metric for admissions into Korean universities and employment at Korean corporations (irrespective of whether English is actually needed or not). Perhaps it is for this very reason that the average (but not every) South Korean is more concerned about getting the “right answer” on an English aptitude exam than on actually learning to use it on a practical basis.
    As the evidence shows, quantity does not always translate to quality. The average South Korean student has been exposed to nearly 20,000 hours of English education from kindergarten through university—another staggering figure–according to the EF Education First survey. If you adhere to Malcolm Gladwell’s argument in his book Outliers, which asserts that it takes about 10,000 hours to become a “genius” (highly specialized expert) in a particular area, virtually every South Korean should be an English genius, in other words, at least proficient in aspects of writing, listening, and speaking. But unfortunately, this is not always the case—although it should be, given the resources underlying English language acquisition.
    Not all may agree with Gladwell, but certainly a consensus can exist that 20,000 hours of exposure to English education (or even a notable fraction of that figure, if you don’t agree with EF’s figures)—is not ideal.
    The extreme economics of South Korea’s “English fever” syndrome represents not only a dire financial drain on the national economy, but also a socio-economic one. Many families are separated by choice for months or years, so that one parent (typically the father) earns money to finance such extreme educational costs. In this “goose father” setup, such funding earned in the separate country is then sent to the other parent (often the mother) who is taking care of the child to study English overseas. Such voluntary family separation has and will continue to reap socio-economic problems if it continues.
    So what is the solution? Obviously, no silver bullet answer exists. And we have all heard the usual posited solutions: better teachers, more customized classes, innovative curriculum development, and the like. Thus far, however, little progress has been made. So perhaps a more forward approach could be considered. For instance, as one example, the country could embrace English fully and entirely by making it an official national language (as Singapore, which has one of the world’s highest education and GDP/capita rates in the region, among other countries) in addition to Korean. This may seem drastic and even radical for some, but integrating the language into all levels at school and throughout the country could make the nation more in line with its aspirations of being a “Middle Power” and socio-economic hub. Or instead, it should focus on less English education for most of its students, while require extreme English education for those only who will need it on a regular basis for their future global career trajectory.
    For a shorter version of this article’s topic (with an accompanying video interview clip) in the Wall Street Journal’s (WSJ) Korea Realtime website, CLICK HERE.

    If interested in more Asia-related research and consulting services, CLICK HERE to contact us at the Asia-Pacific Global Research Group.

    Does South Korea Have the Smartest Kids?: 5 Things to Consider

    October 3rd, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    1. Greed to be degreed?: Korea has the highest percentage of young people with high school diplomas and bachelor’s degrees among the member countries of the Organization for Economic Cooperation and Development (OECD), according to a survey published last month. Ninety-eight percent of Koreans aged 25-34 graduated from high school as of 2011 while 64 percent graduated from college or graduate school, according to the OECD. It was the fifth straight year South Korea topped the list in terms of high school education and the fourth consecutive year it ranked No. 1 in college education.
    Analysis: South Korea has transformed from a country that was undereducated to a modern economy that is arguably overeducated—meaning that the country’s supply of highly educated graduates greatly outnumbers the demand for such graduates (from a very narrow bandwidth of domestic South Korean firms, namely the large conglomerates, such as Samsung, Hyundai, and LG, to name a few).
    2. Korean education isn’t cheap, but is it worth it?: Such achievements at the national level comes with costs and negative socio-economic externalities. Annual tuitions at Korean universities in 2011 averaged $5,395, the fourth highest among 25 countries, following Ireland at $6,450, Chile’s $5,885 and the United States’ $5,402. The survey found that tuition rates at South Korea’s private universities were the fourth-highest, trailing only behind the U.S., Slovenia and Australia.
    Analysis: Given South Korea’s GDP per capita, and factoring in purchasing power parity (PPP), the country’s tuition rates are considerably high. But education is an investment. Thus, so long as one’s education investment has a reasonable return on investment (ROI), then such investment (and thus relatively high tuition rates) should be reasonable. However, this is an open question, given the current job market in which the graduation employment rates of most of South Korea’s top universities are in the 60-70 percentile range.
    3. Going private for basic education: Private Cram School spending is a near necessity: Under Korea’s fiercely competitive education system, Koreans have become used to paying for supplementary education from private cram schools, or hagwon.
    The survey showed that Korea spent 7.6 percent of its gross domestic product on education as of 2010, the third-highest following Denmark at 8 percent and Iceland at 7.7 percent. But it was top of the list in terms of private spending on public education (as opposed to government spending), which accounted for 2.8 percent of its gross domestic product, three times higher than the OECD average of 0.9 percent.
    Analysis: The near necessity to need financing for private education above and beyond what is needed for public education sends some worrisome signals. First, that the public education K-12 structure is not working properly (i.e., not pareto efficient). Second, that the need for such additional private education will increase South Korea’s already prevalent gap between the haves and have-nots. Economically, this is non-optimal since all of South Korea’s human capital is not being put to good use. And socially, such effect can lead to a feeling of detachment and even backlash, in which a sense by many among the nation’s youth of the “Korean dream” may be just that—a mere dream.
    4. Higher education meets higher tuition: There has been growing public concern over high college tuitions, prompting the government to spend more on scholarships and restrict yearly increases in tuition rate to 4.7 percent, down from a previous restriction of 5 percent in 2012.
    Analysis: Scholarships for students are a fairly recent phenomenon in South Korea, compared to places like the U.S., UK, and Australia (based on the traditional collectivist mindset that one’s family should shoulder such responsibility). But with ever-increasing tuition rates, the need for greater scholarships are much needed.
    5. More education with less need for financing: One of President Park Geun-hye’s presidential campaign pledges was to reduce college tuition by 50 percent, while the Education Ministry pledged to be able to give scholarships to all students in the bottom 30 percent.
    Analysis: More funding should be allocated towards this end. This is especially the case since South Korea’s greatest asset is its people (i.e., thus, greater human capital investment would prove beneficial, particularly in a country with a shrinking population and exceedingly low birth rates). However, such pledge was during President Park’s pre-presidency campaign efforts. So it is yet to be seen whether such words will culminate into action. If so, it will be welcomed by many.
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