The changing value of college education in Korea: Focusing on its heterogeneous wage returns across birth cohorts (1956-1986)^*1)

This study explores the changing value of college education in Korea using the Education and Social Mobility Survey from KEDI. Specifically, it focuses on how the college degree has affected social stratification by examining its heterogeneous wage returns contingent on individual likelihood of college completion. We perform empirical analysis on data consisting of three birth cohorts with two different treatment conditions. The key findings are threefold. First, the average effects of college on wages drastically decreased across the three birth cohorts. Second, the effects of college on wages significantly varied by individual propensity to achieve a college degree, and the patterns of effect heterogeneity changed from negative selection to positive selection across the three birth cohorts. Third, the effect heterogeneity of elite college degree shows negative selection pattern for all three cohorts. The overall implication is that the college degree in Korea has reinforced social reproduction and that the economic benefits of a college degree have diminished significantly for disadvantaged students.