⚡ Key Takeaways
According to a study presented at a joint conference by the Bank of Korea, CEPR, and the OECD, if there were no "status competition" effect where parents compare their children's educational achievements with those of other families, the average number of children born to South Korean women born between 1970 and 1975 is estimated to have risen from the actual 1.92 to 2.45, an increase of about 28%.
The OECD has pointed to South Korea's intense rush toward elite universities and top-tier jobs as the "Golden Ticket Syndrome." The analysis suggests that rather than the cost of infant childcare itself, subsequent private tutoring expenses, housing costs, and massive income losses suffered by women after childbirth are the primary structural factors hindering childbirth.
The research team proposed levying taxes on private education spending to curb excessive educational competition and using the secured revenue for childbirth incentives as a policy alternative. However, experts note that reversing South Korea's ultra-low fertility rate requires addressing not only education, but also the labor market, housing, and work-life balance issues collectively.
1. "We Must Keep Up with Others"... Private Education Competition Deterring Childbirth
The narrative that people are not having children because raising them is too expensive is familiar. But what if it is not simply that education is costly, but rather the competitive drive of "I must spend as much as others spend" that is reducing childbirths?
At a joint conference hosted by the Bank of Korea, the Centre for Economic Policy Research (CEPR), and the OECD on September 2, 2026, a research team including Professor Kim Seong-eun of Sejong University, Professor Michèle Tertilt of the University of Mannheim in Germany, and Professor Minchul Yum of Virginia Commonwealth University presented findings analyzing the relationship between educational competition and fertility rates in South Korea.
The researchers focused on "status competition." This refers to a phenomenon where parents evaluate their children's educational achievement not in absolute terms, but by comparing them with peers from other families, spending more money on private education to ensure they do not fall behind. The research team estimated that without this status competition effect, the average number of children born to South Korean women born between 1970 and 1975 would have increased from the actual 1.92 to 2.45—an increase of approximately 28%.
Of course, this does not mean "if private education did not exist at all." It is an estimate from an economic model removing the status competition effect where parents increase education spending due to comparisons with other households. Nevertheless, the findings indicate that educational competition has likely exerted a substantial impact on fertility decisions.
2. Heavier Burden of Private Education on Lower-Income Families
What is noteworthy is not the absolute dollar amount of private education expenses, but the share of income it occupies. According to the researchers' analysis, households in the bottom 20% income bracket spent 8.4% of their income on private education. In contrast, the top 20% bracket spent 5.1%. While high-income earners spend more in absolute amounts on private education, the relative burden felt by households is actually higher among lower-income groups.
However, another issue arises here. When the upper class spends heavily on private education, the burden does not remain confined to them alone. The research team utilized historical and regional variations in curfews on late-night private cram schools (hagwons) to analyze how changes in private education spending by high-income brackets affected other income tiers. The results estimated that when private education spending by the top 15% of households decreased by 10%, the share of private education spending by the bottom 50% of households also declined by 0.4 to 0.9 percentage points.
When educational competition at the top eases, spending below also decreases. Put conversely, the spending levels set by the upper class can serve as an "educational expenditure baseline" for society as a whole. Driven by anxiety that "my child must not fall behind," middle- and low-income families are also pulled into the race. As the cost invested in a single child expands, choosing to have a second or third child becomes an increasingly difficult decision.
3. South Korea's 'Golden Ticket Syndrome'
An international organization has coined a term for this dynamic: the "Golden Ticket Syndrome." This is the expression used by the OECD in analyzing South Korean society.
In its 2022 Economic Survey of Korea, the OECD described South Korea's intense competitive structure—where people strive to enter top universities and leverage them into stable, high-paying jobs in conglomerates or the public sector—as the "Golden Ticket Syndrome." The OECD revisited this issue in its 2024 Economic Survey and in "Korea's Unborn Future," a report focusing on the country's low fertility.
The core of the problem does not lie merely in a handful of "elite universities." Because the gap in career prospects between graduating from such universities and not doing so is vast, both parents and students pour immense amounts of time and money into competing for these narrow "golden tickets."
South Korea's private education participation rate clearly illustrates this. According to Statistics Korea, the private education participation rate among elementary, middle, and high school students reached 78.5% in 2023. The OECD also noted that South Korean parents spend, on average, approximately 10% of their disposable income on private education.
4. Yet Childcare Costs Are Lower Than the OECD Average?
A paradox emerges here. Based on the OECD's standard dual-earner household with two children, South Korea's net childcare costs are on the lower side compared to the OECD average. This is because the South Korean government has long expanded free infant childcare and diverse childcare subsidies.
Yet South Korea's fertility rate remains among the lowest in the world. This is precisely the point the OECD highlights: resolving only the initial childcare costs right after birth does not eliminate the ongoing costs and risks parents must bear moving forward.
There is the private education competition that begins as the child grows, housing costs incurred while moving in search of good schools and educational environments, and the career and income losses women must endure due to childbirth and parenting. In particular, the career disruption for women is substantial.
Analyzing the so-called "Motherhood Penalty" experienced by women who give birth in South Korea, the OECD estimated that women suffer a long-term labor income loss of approximately 66% due to childbirth.
A similar issue was reaffirmed at this Bank of Korea conference. In a separate study by Professor Hwang Ji-soo of Seoul National University, it was analyzed that five years after childbirth, a South Korean woman's income is approximately 43% lower compared to what it would have been had she not given birth. In contrast, fathers showed little change in income before and after childbirth.
Ultimately, having a child in South Korea is not just a matter of affording formula or daycare fees, but a decision that entails bearing decades of subsequent education costs, housing expenses, and parents'—especially women's—career losses.
5. Will Taxing Private Education Increase Births?
What, then, is the solution? Among the policy recommendations put forward by the research team, one stands out: imposing a tax on private education spending. The goal is twofold: first, to curb excessive educational competition by raising the price of private education; and second, to utilize the tax revenue collected as funds to combat low fertility, such as for childbirth allowances.
The concept posits that if higher-spending classes pay more taxes and those funds are returned to families raising children, both educational competition and low birth rates can be alleviated simultaneously. In particular, as seen earlier, if upper-class spending acts as a baseline for other households, curtailing excessive private education spending at the top could help lower educational spending competition throughout the entire society.
However, practical counterarguments are plentiful. Critics may argue that taxing private education would do little to deter affluent households while only worsening the burden on middle- and lower-income families. There is also the risk of a balloon effect, pushing private education underground or shifting demand toward expensive private tutoring.
Therefore, this proposal should be viewed not as a policy finalized for immediate implementation, but rather as an economic policy proposal exploring how to internalize the social costs of education competition into prices.
6. Ultimately, the Issue Is 'the Cost of Making One Child Successful'
For years, the South Korean government has responded to the low fertility problem primarily by increasing childbirth subsidies and reducing childcare costs. Recently, minor changes have emerged. In 2025, the number of births in South Korea rose from the previous year to approximately 254,000, and the total fertility rate edged up to 0.799, around the 0.80 mark.
However, it is premature to conclude that South Korea's low fertility crisis has entered a recovery phase based solely on these numbers. The problems repeatedly highlighted by the OECD extend beyond the one-off cash payouts given at birth. The ranking of universities, entrance examination competition, the labor market divide between large conglomerates and small-to-medium enterprises or regular and irregular workers, high housing costs, long working hours, and the childcare burden and career penalties concentrated on women after childbirth—these issues may appear distinct, but they converge on a single question:
"To have a child and raise them as successfully as others, what must I give up?" South Korean parents do not engage in the private education race simply out of an unusual desire to spoil their children. It is also driven by anxiety that missing out on the few "golden tickets"—prestigious universities and elite jobs—will fundamentally alter their child's life trajectory. And as the conviction grows that parents must concentrate their money, time, and careers entirely on a single child, having a second child becomes an even more daunting choice.
This is the ultimate question raised by the study: to resolve South Korea's low birth rate crisis, policy must not only reduce the cost of giving birth, but also lower the perceived cost required to raise a single child to be as successful as others.
Deep Dive Q&A
Q1. Does "births would have increased by 28% without private education competition" mean that private education accounts for 28% of the low birth rate?
No. The researchers did not calculate a scenario where private education was completely eliminated. Rather, it means that when the economic model removed the "status competition" effect—where parents raise their own educational investments conscious of other families' spending and their children's achievements—the average number of children born to women in the 1970–1975 birth cohort was estimated to increase from the actual 1.92 to 2.45. Therefore, it should not be interpreted as "28% of South Korea's low fertility rate is caused by private education."
Q2. Why does spending by other classes decrease when private education spending by the wealthy decreases?
The researchers view parental educational investments not as independent decisions, but as interdependent choices. In an analysis leveraging regional differences in late-night cram school curfews, it was estimated that a 10% decrease in private education spending by the top 15% of households reduced the private education expenditure share of the bottom 50% by 0.4 to 0.9 percentage points. In other words, educational investments by upper-income brackets can serve as a "baseline" for other families.
Q3. Why is South Korea's fertility rate low despite its low childcare cost burden?
Thanks to expanded government childcare subsidies, South Korea's net childcare cost burden for certain standard OECD households is lower than the OECD average. However, private education costs, housing expenses, and women's career and earnings losses that occur as children grow remain substantial. Therefore, the OECD analyzes that childcare subsidies alone cannot resolve South Korea's ultra-low fertility rate, emphasizing the need for comprehensive improvements in education, housing, the labor market, and work-life balance.
Q4. What exactly is the OECD's 'Golden Ticket Syndrome'?
It refers to the hyper-competition that occurs as entering prestigious universities and securing stable, well-compensated jobs in large corporations or the public sector is treated like winning a "golden ticket." The OECD has pointed to a structure where significant divides in South Korea's labor market intensify education competition, which in turn leads to massive investments in private education. Thus, the "Golden Ticket Syndrome" is not merely a critique of South Korean parents' educational zeal, but rather a concept explaining the underlying labor market and social structures that generate such educational competition.
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