[In-Depth Look] Gatsby Curve and Professional Vocational Education

Kim Young-woo, Research Fellow at the Win-Win Growth Institute

In January 2012, Professor Alan Krueger presented a significant economic theory. At a progressive gathering in the United States, he summarized that the greater the economic inequality, the harder it is for social mobility, calling this the "Great Gatsby Curve." He diagnosed that over the past 30 years, income inequality in the U.S. has increased, leading to unequal opportunities, and argued that providing equal educational opportunities is crucial to resolving economic inequality.

The Gatsby Curve is an indicator showing the correlation between income distribution and intergenerational mobility. Professor Krueger, a labor economist and former economic advisor to President Obama, conducted joint research in 2011 with Professor Miles Corak titled "Inheritance of Inequality." According to their findings, countries like Denmark with low Gini coefficients allow social mobility even if one is born into a poor family, but in the U.S., where income inequality has intensified, parental income is inherited, making social mobility difficult.

What about South Korea? We also had times when "dragons emerged from the small stream"?cases where despite difficult family circumstances, students studied hard, entered prestigious universities, or passed national exams. This year, among the top 20 high schools producing new students admitted to Seoul National University, specialized high schools, autonomous private high schools, and gifted high schools?where education costs are relatively high?were prominent. Meanwhile, the proportion of students from general high schools decreased compared to the previous year. There is concern that depending on parental income, not only dragons but even the small streams might dry up.

Since COVID-19, the deepening economic polarization has exacerbated difficulties for low-income groups. Statistics show that 70% of single-parent households have experienced worsening economic hardship, with an average monthly income (2.19 million KRW) lower than the average household income (3.89 million KRW). Notably, female heads of households account for more than half of all single-parent families, and about half of them live on government support.

As polarization intensifies, providing educational opportunities to children to break the cycle of poverty is not easy. So far, support for university students from single-parent families or female heads of households has been limited to tuition coverage. For children from near-poverty groups, up to 3.5 million KRW per semester is provided, with payments differentiated by income level. There are also work-study scholarships in some cases, but since COVID-19, the work environment has shrunk, limiting their effective use. As this situation continues, some students studying professional careers reportedly give up their studies.

Professor Krueger stated that as inequality in the U.S. increases, children of wealthy parents have more opportunities to succeed, while low-income groups become more disadvantaged. He emphasized that providing equitable educational opportunities is key to resolving this, as polarization entrenches itself and becomes a source of social conflict.

Today, with the impact of low birth rates and a decrease in good jobs, universities face a deepening crisis. Since employment is not easy even after graduation, professional vocational education that guarantees qualifications and licenses upon graduation is gaining attention. Recently, the Korea Federation of Women Entrepreneurs and the Korea Council for University College Education have agreed on the importance of professional vocational education for children of female heads of households and are planning new projects. Based on funds contributed by these two organizations and companies, they aim to support living expenses for college students. It is hoped that this will be a small seed toward fundamentally solving the deepening problems in our society. Such efforts will help prevent income inequality from leading to unequal opportunities and reduce social conflicts. We hope that children excluded from opportunities will be reborn as "Great Gatsby" professional workers.

Kim Young-woo, Research Fellow, Institute for Shared Growth

This content was produced with the assistance of AI translation services.