The Effects of Parental Competitive Pressure on Private Education Investment

I. Introduction

Education in South Korea has long been the primary mechanism for social mobility, directly influencing an individual’s career success and social standing. Through the era of rapid economic growth and modernization, the reputation of elite universities solidified as a core asset that determines long-term earnings and professional pathways. This dynamic has driven an overheated competitive environment, where the pursuit of academic excellence is viewed as a strategic investment. As a result, educational competition has spilled over into the private sector, fostering a massive private education market that is virtually unparalleled in its global magnitude.

As shown in Figure 1, total expenditures on private education initially rose from 20.0 trillion KRW in 2007 to 22.0 trillion KRW in 2009. A period of marginal decline followed until 2015, largely attributed to government-led policy interventions designed to bolster public education. Since 2015, however, the trend has shifted back to a consistent increase, with a particularly sharp acceleration post-2021, culminating in 29.2 trillion KRW by 2024. The average monthly per capita expenditure nearly doubled during this period, rising from 227,000 KRW in 2007 to 442,000 KRW in 2024. These figures highlight the expanding scale of the private tutoring market and its role as a significant driver of the rising educational cost burden on households.

FIGURE 1.

TRENDS IN PRIVATE EDUCATION EXPENDITURES SINCE 2007

Note: Data are from National Statistical Office on Private Education Expenditure Survey. Expenditures are adjusted using the price index (base year: 2020 = 100) and are expressed in trillion KRW).

Differences in private education investment serve as a critical channel for social stratification. The National Statistical Office (2024) reports that both household income and parental education levels are significant predictors of the quantity of private education received. When considering qualitative aspects, high-SES (socioeconomic status) households possess a comparative advantage in accessing high-value educational services, leading to superior academic outcomes and a higher likelihood of securing admission to prestigious universities. This suggests that educational inequality based on family background can be reproduced through the private education market.

FIGURE 2.

PERCEPTIONS OF PRIVATE EDUCATION AND CORRESPONDING DRIVERS OF EXPANSION

Source: Korea Development Institute, Survey on Public Perceptions of Demographic Change, 2025.

The widespread dependence on private education, despite its societal costs, can be explained by the incentive structures within Korean society. A KDI survey (2025) reveals that a vast majority of the public perceives private education as a necessary safeguard against falling behind in an increasingly competitive environment. Respondents identified excessive academic elitism as the primary driver behind the expansion of private education. Notably, the fact that a vast majority of respondents across their 20s through their 40s share similar perceptions is significant. This suggests that the ‘private education fever’ is not merely a matter of individual parental enthusiasm or personal desire for their children’s success but a structural issue permeating society as a whole. This phenomenon can be interpreted as a survival strategy that the parental generation has learned firsthand through their experiences in a highly competitive society. It stems from a deeply ingrained, chain-like pressure centered on academic background: the belief that one must attend a prestigious university to secure a good job, which requires entering a top-tier high school, and ultimately, starting exam preparation earlier than others.

Of course, academic competition is not a phenomenon unique to South Korean society. Theoretically, education possesses a structural universality as a means of competing for social status. According to Collins’ status competition theory (1979), as academic credentials are perceived as a tool for securing social standing, society becomes plagued by ‘diploma disease’ - a phenomenon in which individuals strive to obtain degrees regardless of their actual job requirements. Furthermore, as the relative value of a degree becomes more significant than the actual acquisition of knowledge, individuals incessantly pursue higher levels of education to secure superior credentials over others. This process leads to ‘credential inflation’, where the level of education required to attain the same social status steadily rises. Consequently, rather than expanding opportunities for social mobility, this phenomenon results in intensified competition.

In addition to its role in status competition, private education functions as a positional good, through which individuals increase consumption to distinguish themselves from others. Because positional goods are inherently defined by relative ranking, individuals tend to allocate a larger share of their resources to these goods to secure a competitive advantage. Given South Korea’s socio-economic landscape - where the reputation of one’s university and major serves as a critical benchmark for social status - the absolute scarcity of elite university seats and high-tier jobs provides a rational basis for households to expand their private education expenditures. In such an environment, competitive waste - the redundant allocation of resources to obtain limited gains - becomes particularly pronounced. Ultimately, this hyper-competitive climate exerts significant pressure on parents to secure their children’s future competitiveness, serving as a key driver that pushes children into the private education market at increasingly earlier ages.

Accordingly, this study analyzes the issue of private education from the perspective of status competition rooted in socio-structural dynamics. While studies thus far have primarily focused on the correlation between participation in private education and academic achievement and/or the disparities in expenditures across income levels, there has been a relative lack of integrated research on the structural mechanisms that trigger and reproduce this dependence. To address these limitations, this study empirically investigates whether parental competitive pressure is associated with private education investment. For our empirical measures of private education dependence, we employ measures of private education investment, in this case the number of private academies, participation time, and spending, to determine its expansion.

The remainder of this paper is organized as follows. Chapter 2 reviews the existing literature on the effects of private education. Chapter 3 diagnoses the current competitive environment in South Korea. Chapter 4 presents the empirical framework for analyzing the impact of parental competitive pressure on private education investment. Chapter 5 discusses the results of the analysis, and Chapter 6 concludes with policy implications for mitigating the structural dependence on private education.

II. Existing Literature

In South Korea, private education has evolved to play a role in complementing public education. It has become an indispensable component within a competitive college entrance system. As the significance of higher education intersects with the hierarchical stratification of universities, parents increasingly rely on private education to enhance their children’s academic achievement and admission prospects. Consequently, private education has expanded beyond simple remedial learning into a pervasive structural phenomenon.

Internationally, private education has been introduced through the concept of ‘shadow education’ (Bray, 2014). It exists alongside the formal education system, taking on a character that either mirrors the progress and content of regular classes or precedes them. While some studies highlight the positive impact of private education on academic performance, others emphasize that disparate access based on economic conditions exacerbates the educational gap. This influence is particularly pronounced in countries characterized by high-stakes testing systems, such as university entrance examinations.

However, the relationship between private education participation and academic achievement varies by region. Analyses utilizing OECD PISA data reveal a strong positive correlation in East Asian countries, whereas the effect in Western contexts is often marginal or statistically insignificant (Karakus et al., 2024). This suggests that the efficacy of private education is mediated by the nature of the educational system, the stakes of examinations, and the broader socioeconomic environment.

Domestic literature indicates that while private education may yield gains in subjects such as mathematics and English, these effects are not uniformly distributed across all students. Park and Kim (2022) examined a large-scale longitudinal sample of 2,376 students from the Gyeonggi Education Panel Study (GEPS, 2012). To address limitations such as endogeneity and sample representativeness, they conducted a non-parametric mobility analysis of academic grades. Their findings revealed positive effects for mathematics at the elementary level, suggesting a need for intensive public school support during this period to mitigate the private education burden.

Kang and Park (2015) conducted a comparative analysis between private education and self-directed learning, finding that as students progress to higher school levels, the effectiveness of self-directed learning increases while that of private education diminishes. Specifically, in middle school, self-directed learning outperformed private education. In high school, only self-directed learning showed a statistically significant impact on academic improvement. These results empirically underscore the relative inefficiency of private education compared to self-directed efforts. This aligns with Silva’s (2021) critique of the Korean university entrance system’s heavy reliance on test scores, pointing out that students are making inefficient investments in private education.

Further research argues that the outcomes of private education are heavily dependent upon one’s socioeconomic background - specifically parental educational fervor, income, and attainment (Yu and Park, 2015). Using hierarchical regression and path analysis, Cha and Oh (2012) found that high-SES parents share high educational aspirations for their children, which serves as a core determinant of student engagement and achievement. Surprisingly, their analysis showed that the efficacy of public education was highest, while private education was less efficient than self-directed learning. Additionally, Lee (2009) found that households with higher income/assets and lower debt had higher private education expenditures, a trend particularly sensitive to debt levels among middle-income groups. Other studies (Sung and Hong, 2008) confirmed that higher maternal education and an urban residence correlate with increased private education investment. Kim et al. (2019) characterized private education as a normal good, noting that even low-income households bear a disproportionately high financial burden relative to their income.

Regional disparities also persist, with higher participation rates in metropolitan areas (Lim et al., 2017). The density of private academies and the proportion of highly educated residents in a region significantly increase the probability of participation. Conversely, Park and Hwang (2018) found that while the effect of private education did not vary significantly by region, the tutored group in their study consistently outperformed the non-tutored group by 0.3 grades in elementary school and 0.564 grades in middle school.

Regarding long-term effects, Lee et al. (2016) demonstrated that while high school tutoring improves short-term outcomes such as CSAT scores, it has no statistically significant impact on long-term labor market outcomes, such as initial wages. This suggests that private tutoring is a short-term investment focused on university admission rather than long-term human capital accumulation, indicating that its value may be socially overestimated. Recent studies of early childhood education also highlight negative externalities. While arts and physical education may aid social development, excessive academic tutoring increases stress and causes behavioral issues in young children (Kim et al., 2024).

In summary, existing literature has predominantly focused on describing the outcomes and inequalities associated with private education. There remains a relative scarcity of integrated, in-depth research on the fundamental socio-institutional structural mechanisms that trigger and reproduce private education dependence. This study contributes to the literature in two ways. First, it provides new empirical evidence using the latest wave of the Panel Study on Korean Children (PSKC Wave 15, 2022) to examine how parental competitive pressure is associated with private education investment. Second, it reconceptualizes private education dependence not merely as a matter of individual choice but as a structurally entrenched phenomenon shaped by competitive pressure and household resources.

III. Competitive Environment in South Korea

This chapter explores the competitive environment of the South Korean labor market while also considering the possibility that this environment is linked to the race for college entrance. The fundamental driver of the excessive educational competition in Korea likely stems from the extremely narrow and restrictive pathways to social and professional success.

To investigate this, we examine the competitive landscape of the South Korean labor market. Utilizing Census on Establishments data from the National Statistical Office and data related to university entrance, we conduct an in-depth examination of how the narrow gate to what is considered to be decent jobs and prestigious universities intensifies excessive competition across society.

Data from The National Statistical Office (2025) clearly illustrates the scarcity of high-quality employment, typically defined as positions within large enterprises (300 or more employees). Out of approximately 25.45 million total employees, those in large enterprises account for only 15.4% (about 3.91 million) (see Table 1). This disparity implies a structural environment in which a vast majority of job seekers must compete for an exceptionally limited number of high-quality positions.

TABLE 1

DISTRIBUTION OF ESTABLISHMENTS AND EMPLOYEES BY REGION AND FIRM SIZE (2023)

Source: National Statistical Office, Census on Establishments, 2025.

The scarcity of high-quality employment is further exacerbated by its extreme geographical concentration. Of the 3.91 million employees in large enterprises, 60.7% (approximately 2.37 million) are concentrated in the Seoul Metropolitan Area (SMA), accounting for only 9.3% of the total national workforce. Specifically, large enterprise employees in Seoul number approximately 1.41 million, representing a mere 5.5% of the total workforce. Consequently, the fact that only 5.5% of all workers nationwide hold jobs in large firms within Seoul underscores a fundamental structural deficit. The supply of preferred employment is not only insufficient but also geographically clustered, fueling intense nationwide competition. This labor market structure is associated with increased spending on private education and heightened competition for university entrance.

In this hyper-competitive labor market, individuals strive to establish a robust market signal to communicate the quality of their human capital most effectively. In South Korean society, admission to a top-tier university serves as the most credible and decisive signal. Thus, competition to secure high-quality jobs often translates into competition for elite university entrance.

Based on an analysis of the 444,870 applicants for the 2024 College Scholastic Ability Test (CSAT), the gateway to top-tier universities is exceedingly narrow. The total enrollment capacity of the top ten universities is 31,990, representing only 7.2% of the applicant pool. This figure drops to 2.5% when restricted to the ‘SKY’ universities (the top three schools). Even when including highly sought-after medical and professional tracks (medicine, pharmacy, dentistry, oriental medicine, and veterinary medicine), the ratios remain at 8.7% for the top ten universities and 3.9% for the top three. These statistics vividly illustrate the severity of the admissions race, positioning elite university entrance as the practical starting point for high-tier labor market competition.

This fierce competition for top-tier universities is also associated with a race for admission to prestigious high schools. As evidenced by the admissions data for higher-ranked institutions, the type of high school attended serves as a significant determinant of success.

As shown in Figure 3, the proportion of students from specialized-purpose high schools increases significantly as university rankings rise. In particular, students from these specialized schools constitute 40.2% of the incoming class at ‘SKY’ universities, a markedly higher percentage than at other institutions. Conversely, the proportion of graduates from general high schools diminishes at higher-ranked universities, standing at only 55.4% for the ‘SKY’ group. This hierarchy confirms a sequential sorting process, where the pressure to secure a competitive edge begins well before the university level.

FIGURE 3.

HIGH SCHOOL BACKGROUND OF UNIVERSITY FRESHMEN: GENERAL VS. SPECIALIZED HIGH SCHOOLS

Note: Author’s calculations based on the Higher Education in School Information Disclosure System.

Figure 3 inevitably reinforces the perception that admission to specialized-purpose high schools provides a significant comparative advantage for entry into elite universities. Consequently, the starting point of educational competition has shifted down to the elementary and lower secondary levels, preceding the high school admissions process. This shift triggers an overheated private education market aimed specifically at high school entrance exams. Such a phenomenon indicates a structural problem where competition is exacerbated through accelerated learning and hierarchical entry barriers.

In South Korean society, the pathways to success - defined by high-quality jobs and prestigious universities - are extremely restrictive. The stark contrast between the 10% probability of securing top-tier employment and the 4% probability of elite university admission underscores these structural constraints. These limited opportunities create systemic barriers that are difficult to surmount through individual effort alone, forcing all participants into an excessive race to pass through an exceptionally narrow gate. This competitive pressure, originating in adolescent entrance exams and extending through higher education into the labor market, may contribute to heightened aggregate competition across society.

Ultimately, South Korean society faces profound structural issues characterized by disproportionate competition for a few successful pathways and an imbalance of opportunity. Within this entrenched competitive environment and its restrictive success routes, the behavior of individuals seeking a competitive advantage at an increasingly earlier age must be understood as a rational choice and a survival strategy. Also in this context, the massive expenditures on private education and the intensification of early-stage competition may be interpreted as outcomes associated with this structural disequilibrium.

IV. Empirical Analysis

B. Data

1. Panel Study on Korean Children (PSKC)

This study utilizes data from the Panel Study on Korean Children (PSKC), a comprehensive longitudinal survey designed to track the growth, development, and environmental factors influencing children in South Korea. Initiated in 2008 (Wave 1), the PSKC has released data up to its 15th wave (2022). For the empirical analysis, we employ a five-year unbalanced panel dataset from Waves 11 through 15. This period corresponds to the children’s transition from the fourth grade of elementary school to the second grade of middle school - a critical developmental stage for analyzing the structural drivers of private education dependence as students approach higher-stakes academic competition.

In this study, a key independent variable is constructed for the empirical analysis. The primary explanatory variable, parental competitive pressure, is measured through a composite of 15 survey items, as detailed in Table 2. Each item is rated on a five-point Likert scale, ranging from 1 (Strongly Disagree) to 5 (Strongly Agree). For the analysis, we calculated the mean score across these 15 items to derive the final value for the variable. Based on a total of 6,618 observations, the mean of this variable is 2.36 (SD = 0.76), with values ranging from 1 to 5. To evaluate the measurement reliability of the composite index derived from the 15 indicators, its internal consistency was examined. The analysis yielded a Cronbach’s alpha of 0.919, indicating high internal consistency among the items.

TABLE 2

MEASUREMENT OF PARENTAL COMPETITIVE PRESSURE

Source: Panel Study on Korean Children, 2025.

The items measuring parental competitive pressure reflect two distinct dimensions. The first is the psychological dimension of academic achievement pressure and anxiety. This refers to an attitude by which parents regard their child’s academic success as their primary concern and a benchmark for overall success, experiencing significant psychological apprehension and worry based on the child’s academic outcomes.

The second is the behavioral dimension of regulation and overt intervention. This illustrates an active pattern of involvement, where parents directly control daily study hours and lifestyle habits—while strictly managing environmental factors—to maximize learning efficiency.

Consequently, these indicators can be categorized and analyzed as follows: 1) psychological pressure, reflecting parents’ internal values; and 2) overt intervention, representing the exercise of practical control.

• 1) Parental Academic Achievement Pressure and Anxiety (Items 1, 4, 5, 8, 9, 15)1: These items assess the degree to which parents emphasize high-reaching academic goals, such as outperforming peers and the indispensability of career success. This subscale reflects a psychological dimension where parental pressure and anxiety manifest through a persistent preoccupation with overall academic outcomes and competitive superiority.

• 2) Parental Behavior Intervention (Items 2, 3, 6, 7, 10, 11, 12, 13, 14): These items capture parental behaviors aimed at restricting and regulating non-academic activities, including sleep, smartphone/computer usage, and social interactions with peers.

2. Descriptive Statistics

Table 3 presents the descriptive statistics pertaining to the key variables utilized in the empirical analysis.

TABLE 3

DESCRIPTIVE STATISTICS

Source: Panel Study on Korean Children, 2025.

The primary explanatory variable, parental competitive pressure, has a mean score of 2.36 (on a five-point scale) across 6,618 observations. Regarding the dependent variable of private education investment, the PSKC data distinguishes between responses from children and parents. The number of private academies is derived from child respondents, whereas time spent and expenditures on private tutoring are sourced from parent respondents. As a result, the sample sizes differ across the variables. The number of private academies recorded 4,495 observations (M = 2.49, SD = 1.33), while the time and cost of private education accounted for 6,618 observations. Additionally, observations reporting a value of zero are included in all measures.

To satisfy the normality assumption, the dependent variables—private tutoring hours and expenses—underwent logarithmic transformation. For observations with a value of zero, log-plus-one transformation is applied, ensuring that zero values are consistently represented as zero after the transformation.

We incorporate several control variables at the child, parental, and household levels. These include the child’s gender and age, residence (Seoul Metropolitan Area or not), birth order (first-born status), household income, parent’s age and educational attainment, and the mother’s employment status. Detailed statistical summaries for these control variables are provided in Table 3.

C. Methodology

To account for the longitudinal nature of the data, this study employs a panel data regression model. The longitudinal structure allows us to control for unobserved heterogeneity and analyze the dynamic relationship between parental pressure and educational investment over time. This is defined as shown in Equation (1).

In this equation, Y_it represents the dependent variable for child i at time t, specifically denoting private education investment (measured by the number of academies, ln(weekly hours) or ln(monthly expenditure)); Pressure_it is the primary explanatory variable, representing the level of parental competitive pressure; and X_it denotes the vector of time-varying control variables, in this case household income, mother’s employment status, and other socioeconomic characteristics. Finally, α_i captures individual-specific fixed effects (or random effects), γ_t represents time trend, and ε_it is the idiosyncratic error term.

V. Empirical Results

A. Pooled OLS Estimates

Table 4 presents the results of the pooled ordinary least squares (OLS) estimation, which analyzes the impact of parental competitive pressure on private education investment, as measured by the number of academies, the log-transformed values of weekly hours, and expenditure levels.

TABLE 4

POOLED OLS ESTIMATES OF PARENTAL COMPETITIVE PRESSURE ON PRIVATE EDUCATION INVESTMENT

Note: *, **, and *** indicate significance at the 10%, 5%, and 1% levels, respectively.

The empirical results demonstrate that parental competitive pressure, the primary explanatory variable, exerts a statistically significant positive effect on all three measures of private education investment. Specifically, higher levels of parental competitive pressure correlate with an increase in the number of private academies attended, longer weekly hours, and substantially higher average monthly expenditures. These findings provide strong empirical evidence that parental competitive pressure serves as a key driver in triggering dependence on private education.

Regarding the control variables, an increase in the household income level is found to raise both the time and financial resources allocated to private education significantly. Furthermore, higher parental educational attainment is positively and significantly associated with all dimensions of private education investment. Additionally, the analysis reveals a ‘first-born premium’ in educational investment, as expenditures and time devoted to the eldest child are significantly higher across all categories.

While pooled OLS gives us a starting point, it can be biased because it does not account for individual differences as to whether they that stay the same over time. To obtain get more reliable results, we also use fixed effects (FE) and random effects (RE) models. These methods help us control for constant household traits, giving us a clearer look at how parental pressure affects educational spending. Despite these efforts, potential reverse causality remains a concern. The empirical results should be viewed with careful consideration regarding their causal implications.

B. Model Selection: Random Effects vs. Fixed Effects

Table 5 summarizes the estimation results from the random effects (RE) and fixed effects (FE) models, conducted to identify the most appropriate empirical specification for this longitudinal analysis.

TABLE 5

RANDOM EFFECTS VS. FIXED EFFECTS ESTIMATES

Note: *, **, and *** indicate significance at the 10%, 5%, and 1% levels, respectively.

The RE model estimates show that parental competitive pressure has a statistically significant positive impact on all measures of private education investment (number of academies, ln(weekly hours), and ln(expenditure)). However, in the FE model, which controls for time-invariant individual heterogeneity, only private education expenditures remain statistically significant. Specifically, a one-point increase in the parental competitive pressure score is associated with an approximately 3.7% increase in expenditures on private education expenditure.

To determine the statistical preference between the two specifications, we conducted a Hausman test. These test results yielded a significant p-value, leading to the rejection of the null hypothesis that the individual-specific effects are uncorrelated with the regressors. We chose the fixed effects (FE) model over the random effects (RE) model for this study. The FE model provides more consistent estimates because it controls for fixed individual characteristics that could lead to biased results. Consequently, the final discussion of this study focuses on the results derived from the fixed effects model.

C. Main Results

Table 6 presents the estimation results of the fixed effects model regarding the impact of parental competitive pressure on private education investment. Column (1) accounts solely for individual fixed effects, while Column (2) adds the time trend. The results indicate that changes in parental competitive pressure do not have a statistically significant effect on changes in the number of private academies attended. Furthermore, regarding the weekly hours of private education, statistical significance is not found in Column (3) or Column (4).

TABLE 6

FIXED EFFECTS ESTIMATES OF PARENTAL COMPETITIVE PRESSURE

Note: *, **, and *** indicate significance at the 10%, 5%, and 1% levels, respectively.

In contrast, the analysis of private education expenditures reveals a robust relationship. In particular, in Column (6), which controls for both individual fixed effects and the time trend, a one-point increase in the parental competitive pressure score is associated with a 3.7% increase in tutoring expenditures.

These findings suggest that parental competitive pressure is reflected in increased financial spending rather than in the number of private academies or weekly study hours. Interpreting these results in a real-world context, even parents experiencing intense competitive pressure may find it difficult to increase quantitative time inputs due to the child’s finite time constraints. Consequently, when faced with heightened pressure, parents are more likely to opt for enhancing the qualitative level of private education rather than its quantity. This behavior can be understood as a strategic investment decision by parents to secure a competitive advantage for their children within a constrained educational environment.

As established in the results of Table 6, parental competitive pressure is a primary driver of private education investment, particularly manifested through increased expenditures. To examine the persistence of this influence throughout the analysis period further, we analyze the annual coefficients of parental competitive pressure on private education expenditures.

Figure 4 illustrates the results of cross-sectional analyses conducted annually from 2018 to 2022. As indicated in the graph, parental competitive pressure consistently exerted a statistically significant positive effect on the increase in private education cost each year. Collectively, these findings confirm that parental pressure has acted as a consistent and significant determinant of rising educational expenses over the sample period.

FIGURE 4.

EFFECTS OF PARENTAL COMPETITIVE PRESSURE ON PRIVATE EDUCATION EXPENDITURES BY YEAR

Notably, this influence, which showed a temporary weakening in 2019, regained momentum and exhibited an upward trend after 2020. This year-by-year analysis confirms that parental competitive pressure is a key mechanism consistently driving demand in the private education market.

As previously noted, parental competitive pressure can be categorized into psychological and behavior dimensions. We now aim to identify the specific source of the results in Table 6 and determine which dimension of parental competitive pressure exerts a greater influence on private education investment.

Table 7 presents the results regarding how parental competitive pressure, stemming from both psychological and behavioral factors, affects private education investment. As shown in the table, pressure driven by psychological factors significantly increases both the time and expenses directed toward private education. In contrast, pressure manifested through external behaviors does not show a statistically significant effect on educational investment. These findings highlight that the pressure arising from a desire for one’s child to excel academically is a major driver of private education spending. Based on these results, this study focuses on the impact of psychological competitive pressure, while the results for external factors are provided in Table A1.

TABLE 7

EFFECTS OF PARENTAL ACADEMIC ACHIEVEMENT PRESSURE AND ANXIETY (PRESSURE A) AND PARENTAL BEHAVIOR INTERVENTION (PRESSURE B)

Note: *, **, and *** indicate significance at the 10%, 5%, and 1% levels, respectively.

In Table 8 through Table 10, we examine the heterogeneous effects of parental competitive pressure on private education investment by subsampling the data based on parental educational attainment and household income. Specifically, parental education is categorized into ‘High School Graduate or Lower’ and ‘University Graduate or Higher’, while household income is bifurcated at the threshold of four million KRW per month.

TABLE 8

HETEROGENEOUS EFFECTS OF PARENTAL ACADEMIC ACHIEVEMENT PRESSURE AND ANXIETY BY FATHER’S EDUCATION

Note: *, **, and *** indicate significance at the 10%, 5%, and 1% levels, respectively.

TABLE 9

HETEROGENEOUS EFFECTS OF PARENTAL ACADEMIC ACHIEVEMENT PRESSURE AND ANXIETY BY MOTHER’S EDUCATION

Note: *, **, and *** indicate significance at the 10%, 5%, and 1% levels, respectively.

TABLE 10

HETEROGENEOUS EFFECTS OF PARENTAL ACADEMIC ACHIEVEMENT PRESSURE AND ANXIETY BY HOUSEHOLD INCOME

Note: *, **, and *** indicate significance at the 10%, 5%, and 1% levels, respectively.

The criteria for subsample classification are as follows. First, for educational attainment, we followed the standard approach of categorizing respondents into those with a high school diploma or less and those with a bachelor’s degree or higher. Descriptive statistics from our dataset show that 74% of parents hold a university degree or higher. To create a comparable grouping for household income, we divided the sample into the bottom 25% and the remaining 75% for our analysis.

The analysis reveals that the impact of parental competitive pressure emerges for parents with a university degree or higher only in terms of weekly hours. Regarding private education expenses, the results indicate that higher parental competitive pressure is associated with increased spending. However, the effect is not statistically significant.

The analysis based on maternal educational attainment reveals a slightly different pattern from that of the father’s education. Specifically, for households where the mother’s education level is high school graduate or lower, parental competitive pressure did not exert a statistically significant influence on either weekly hours or expenditures. In contrast, for households where the mother has a university degree or higher, both variables show a statistically significant increase in response to heightened pressure.

The results by household income level, presented in Table 10, further reinforce the consistent patterns observed in Table 8 and Table 9. This indicates that the heterogeneous impact of parental competitive pressure on private education investment is similarly manifested across different income strata. Specifically, parental competitive pressure has a statistically significant positive effect on both weekly hours (0.040) and expenditures (0.042) only in households with a monthly income of four million KRW or higher.

In summary, the positive relationship between parental competitive pressure and educational investment is primarily driven by high-SES (socioeconomic status) households - those with higher parental education and income levels. These findings suggest that private education is more than just an individual family’s choice. Instead, it shows how structural factors, such as parental pressure, interact with household resources such as income and education to contribute to educational inequality.

While the previous analyses focused on the impact on the mean of private education investment, we finally conduct a quantile regression analysis to examine the heterogeneity of the competitive pressure effect across the distribution of weekly hours (left) and expenditures (right). Figure 5 displays the estimated coefficients of parental competitive pressure for private education time and expenditure from the 10th to the 90th percentiles.

FIGURE 5.

EFFECTS OF PARENTAL ACADEMIC ACHIEVEMENT PRESSURE AND ANXIETY ON PRIVATE EDUCATION EXPENDITURES: QUANTILE REGRESSION ANALYSIS (LEFT: WEEKLY HOURS VS. RIGHT: TUTORING EXPENDITURES)

The figure on the left illustrates changes in private tutoring hours across different quantiles of parental competitive pressure. As shown, even with an increase in parental pressure, there is no statistically significant rise in study hours. This can be interpreted as a result of physical time constraints on children’s learning schedules. On the other hand, the figure on the right shows that a higher level of competitive pressure leads to increased private education expenditures across most deciles. The impact of parental competitive pressure is significantly more pronounced, except below the 30th percentile. Furthermore, competitive pressure increases in accordance with the rise in quantiles.

These results suggest that households already spending heavily on private education are more sensitive to competitive pressure, responding by aggressively scaling up their educational investments. This implies that the intensification of educational competition ultimately serves as a mechanism that widens the gap in educational expenditures, further entrenching socioeconomic disparities.

VI. Conclusion and Policy Implications

In our society, alongside the extreme university hierarchy, the social perception that entering a prestigious university is a prerequisite for success has become deeply entrenched. As a result, private education has long been regarded as a necessity rather than an option. This has resulted in a phenomenon by which parents cling to private education, despite significant financial burdens, to provide better opportunities for their children. Consequently, private education has evolved beyond mere supplementary learning into a socio-structural issue that exacerbates educational inequality and increases the financial burden on households. Excessive competition for private education is now identified as an important factor contributing to social stratification and the erosion of the social ladder, making policy interventions more critical than ever.

Against this backdrop, this study analyzes the impact of parental competitive pressure on private education investment. The empirical results reveal that parental competitive pressure does not significantly increase the quantity of private education (number of academies or tutoring hours) but exerts a statistically significant positive effect on tutoring expenditures. Specifically, a one-point increase in the parental competitive pressure score is associated with a 3.7~4.4% increase in expenditures. This suggests that when faced with a child’s finite time constraints, parents opt for a strategic shift toward qualitative investment (higher-cost or specialized services) to secure a competitive advantage.

Furthermore, the impact of parental competitive pressure on private education investment exhibited heterogeneous patterns depending on the mother’s educational attainment and on household income levels. One possible explanation for the weaker relationship observed among lower-income households is the presence of liquidity constraints. Even when parental competitive pressure is high, limited financial resources may restrict the ability of households to increase private education expenditures. In such cases, parental competitive pressure may not translate into higher spending, despite similar levels of educational aspiration.

This suggests that family background - specifically education and income - plays a decisive, moderating role in converting parental competitive pressure into actual investment. Ultimately, these findings serve as empirical evidence of the reality in Korean society, where socio-structural factors (parental competitive pressure) and household resources (income/education) combine to reproduce educational inequalities, moving beyond a simple matter of individual choice. Based on these findings, we propose that the focus of policy must shift from regulating the private education market to fundamentally alleviating parental competitive pressure. The findings of this study offer significant policy and academic implications, particularly by demonstrating that parental competitive pressure originates from psychological mechanisms, including the drive for academic achievement, the pursuit of relative advantage, and parental anxiety. Our specific recommendations are as given below.

First, addressing the dual structure of the labor market is a matter of urgency. The Korean labor market is fragmented into a primary market characterized by high wages and stable employment and a secondary market defined by low wages and precarious labor, which exacerbates inequalities in working conditions. Therefore, unless the fundamental labor market environment - which currently limits access to decent jobs (primary market) - is improved, parental competitive pressure is likely to remain high.

Second, it is essential to diversify the social perception of success and make long-term efforts to reform the academic-centered social structure. South Korean society relies excessively on a singular and rigid path to success, defined by admission to top-tier universities and employment in large corporations or professional fields. While all societies have paths to success, a high degree of restrictiveness in these paths may function as a structural factor, compelling parents to force their children into intense educational competition to enter such a narrow gate. Therefore, cultural and institutional changes must follow, such as narrowing the gap in social rewards (e.g., wages, status) based on occupation and educational background and recognizing achievements in diverse fields.

Third, policy efforts should be concentrated on addressing the information asymmetry between public and private education. The private education market exclusively produces and distributes vast amounts of data - such as admission track records, customized consulting, and the results of big data analysis – serving as a key factor in the intensification of parental anxiety and the deepening reliance on private education. To overcome the current situation where information provided by public education remains insufficient in terms of both quantity and quality, a system must be established to provide objective admission data and personalized career roadmaps. This would help alleviate the anxiety rooted in information asymmetry and structurally reduce the dependence on private education.

In summary, the reliance on private education stems not merely from flaws in the educational system but from socio-structural issues that leave parents with no choice but to push their children toward private education. South Korea’s intense fervor for private education is interpreted as a phenomenon amplified by the status competition mechanism interacting with a degree-oriented social structure. Given that these structural factors may play an important role in shaping parental competitive pressure, fragmented policies - such as simple regulations or reductions - may be insufficient to produce substantial results. Therefore, it is essential to recognize that the private education issue is a reflection of socio-economic realities and to prioritize policy measures that fundamentally alleviate parental competitive pressure.