The Role of Higher Education in Economic Inequalities and Intergenerational Social Mobility: Empirical Evidence from South Korea and Lessons from the UK

Abstract

Many people are convinced that a higher education degree will guarantee good career aspects for any student, regardless of their family background (Connor et al., 2001; Cho, 2016). Whilst higher education indeed plays a role as an insurance mechanism against the risk of unemployment in many contexts (Office for National Statistics, 2017; Hwang, 2021), a vast body of literature has shown that income-related gaps in both access to and success in higher education are now substantial and has therefore questioned the role of higher education as social mobility’s greatest hope (Canny, 2001; Chetty et al., 2017; Britton et al., 2019; Lee & Choi, 2020). As such, distinguishing between the impacts of family background and higher education on graduates’ later earnings and social mobility outcomes is critical to gain a deeper understanding of the role of higher education in reducing economic inequalities and promoting intergenerational social mobility. This is particularly relevant in the case of South Korea, a context that has seen a dramatic increase in access to higher education and higher earnings of the population with a higher education degree over the past few decades. For the above reasons, the aim of this thesis is to examine intergenerational social mobility mainly in South Korea using further insights from the United Kingdom with various empirical models exploring the role of higher education in economic inequalities and intergenerational social (income) mobility. South Korea is still at its early stage of social mobility research where more evidence is needed on the various determinants of social mobility in that particular context. Given the lack of data however, it is difficult to examine many potential determinants of social mobility in South Korea, namely spatial inequalities. Hence, the case of the United Kingdom is also examined to learn more about the impacts of spatial inequalities on graduates’ earnings and social mobility outcomes. Considering the case of the United Kingdom is arguably worthwhile given that the context of South Korea has some similarities to that of the United Kingdom due to its similar level of social mobility in society and the high concentration of social and financial resources in the capital city, i.e., Seoul or London (World Economic Forum, 2020). This thesis hence bridges the literature in the field of social mobility from South Korea and the United Kingdom to advance our understanding of the relationship between various socioeconomic factors and social mobility outcomes and to examine whether university indeed levels the playing field regarding socioeconomic gaps in the earnings of similar graduates and provides a ‘social ladder’ for those from disadvantaged backgrounds. To achieve the overall aim, this thesis is divided into three standalone but interlinked papers, each responding to a distinct research question. The first paper (Chapter 3) examines if university in South Korea levels the playing field in terms of socioeconomic gaps in the earnings of similar graduates who studied the same discipline subject at the same type of higher education institutions (either two-year or four-year). The results presented in this chapter find that university levels the playing field in terms of socioeconomic gaps in male graduates’ earnings only, and both family assets and income are still important determinants for female graduates’ earnings, conditional on the university attended and discipline subject studied. The results imply that social networks and capital are more important in securing a good job for females, given the evidence of potential labour market discrimination against females as measured by the gender wage gap. More advantaged family backgrounds may be necessary to provide female graduates with better social networks and capital that they need to succeed in the labour market. The second paper (Chapter 4) analyses the role of higher education in intergenerational social mobility in South Korea, either by providing a ‘social ladder’ or a ‘glass floor’. It analyses various measures of mobility rates in the field, e.g., the bottom-to-top mobility rate, middle-class mobility rate, and status maintenance rate. The results indicate that many prestigious universities tend to provide a ‘glass floor’, protecting richer students with modest skills from slipping down the social scale, rather than a ‘social ladder’ for students from disadvantaged backgrounds due to their lower low-income access rates. Instead, public four-year universities turned out to be the main engines of upward social mobility for individuals from the bottom three quintiles of the income distribution. In addition, males show higher mobility rates for all three different measures than females. It implies that higher education in South Korea tends to be less effective at helping female graduates from low-income backgrounds to become high income earners, and hence focusing on higher education alone may not be enough to improve social mobility in South Korea, particularly for females. Lastly, the third paper (Chapter 5) explores if higher education providers in the United Kingdom mediate the impact of spatial inequalities on earnings disparities among similar graduates. The empirical findings show that university in the United Kingdom does not fully eliminate earnings disparities among similar graduates from different neighbourhoods, classified based upon the level of young age participation in higher education. The impact of spatial inequalities on graduates’ earnings is still substantial even after allowing for various demographic features and university-related factors, with individuals from the highest-participation neighbourhoods having higher earnings than those from the lowest-participation neighbourhoods. Overall, this thesis contributes to the social mobility research in South Korea by examining if higher education indeed reduces socioeconomic gaps in the earnings of similar graduates and analysing the role of higher education in intergenerational social mobility. The thesis further suggests the importance of spatial inequalities in the field of social mobility by reviewing the case of the United Kingdom, a potentially comparable context in some respects and where the relevant data are available. Given that a body of literature in South Korea has focused heavily on either a) the average return to higher education without considering low-income access rates or b) the socioeconomic disparities in access to higher education, barely taking into account the later labour market outcomes, this thesis offers new perspectives on the role of higher education in economic inequalities and intergenerational social mobility in South Korea, helping policymakers and researchers attempting to promote equal opportunities in society.