The Long-run Labour Market Effects of Expanding Access to Higher Education in South Korea

Abstract

A 1979 military coup in South Korea mandated that all colleges, public and private, expand their college admission quotas by 30 per cent in 1981 and 50 per cent in 1982. We use birth cohorts that were differentially exposed to this abrupt, exogenous policy change as an instrumental variable to identify the long-term effects of college on labour market outcomes. We find that the college enrollment increase by the mandate led to higher monthly earnings and higher probabilities of prestigious' white-collar employment. We discuss the historical context in which this intervention took place as well as its relevance for developing countries. Copyright (c) 2015 John Wiley & Sons, Ltd.