A Study on the education expenditure burden of households in Korea and eight European countries

Abstract

Our comparative analysis showed that both the household education expenditure burden and the education expenditure gap between households of different economic levels were significantly larger in Korea than in the comparable countries. Education expenditure as a share of total consumption expenditure was 11.1% for all households and 16.2% for four-person households in Korea, significantly higher than for households in Southern European and British countries (2~8.5%) as well as in Nordic and European continental countries (around 1%). Our Gini decomposition analysis found that the relative contribution of education expenditure to total consumption expenditure inequality was higher in Korea (17.1% for all households and 19.2% for four-person households) than in the other countries. This high education cost burden and differences in education investment by household economic status result in inefficiency at the state and individual levels, a high rate of elderly poverty, low child happiness and low birth rate, and fundamentally erode the welfare state’s solidarity value.