Document of The World Bank FILE Copy FOR OFFICIAL USE ONLY CONFIDENTIAL Report No. 1471-KO KOREA EDUCATION SECTOR MEMORANDUM February 14, 1977 Education Projects Division East Asia and Pacific: Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. FOR OFFICIAL USE ONLY CONFIDENTIAL KOREA EDUCATION SECTOR MEMORANDUM TABLE OF CONTENTS Page No. I. INTRODUCTION ....................................... 1 Size and Structure of the Educational System ....... 1 Management and Finance ............................. 3 Goals: Economic and Educational ................... 5 II. PERFORMANCE OF THE EDUCATIONAL SYSTEM .............. 5 Growth and Equality ................................ 5 Educational Quality and Efficiency ................. 8 External Relevance of Education 9 III. GOVERNMENT PLANS FOR THE EDUCATION SECTOR ........... 10 The Formal System .................................. 10 Non-Formal Vocational Training ..................... 10 IV. OTHER ISSUES IN EDUCATIONAL DEVELOPMENT ............ 11 Class Size in Primary Schools ...................... 13 School Fees ........................................ 13 Compulsory Middle School ........................... 13 Industrial Skill Acquisition ....................... 14 Teacher Salaries ................................... 15 Growth of Academic High School and College Enrollment ....................................... 15 Brain Drain ........ 0.........0...................... 16 Management Education ............................... 17 Educational Management . ...................... 17 V. THE BANK'S ROLE IN THE DEVELOPMENT OF EDUCATION AND TRAINING IN KOREA . .... . ... . ... . ... . ... . . 17 Previous and,Planned Projects .................... 17 Possible Future Education Projects ................. 18 Vocational and Technical Education ............ 19 Higher Education ......... ............ .... .. 20 General Secondary Education .........a......... 20 Sector Work ......................... ... ..... .. . 22 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. I. INTRODUCTION Size and Structure of the Educational System Education and training play a more important role in Korea's eco- nomic development than in many other countries. The nation's most significant resource is its literate, skilled and highly motivated work force. Elementary education is universal and almost free, and the proportion of the age group in secondary and higher education is considerably higher than in most other countries with per-capita incomes similar to Korea. This mass education represents a recent phenomenon in Korea; in 1945 the adult literacy rate was only 22%, but by 1966 it was 89%. With primary education virtually universal, rapid expansion continued in secondary schooling during the past decade; but concern with quality slowed the earlier rapid growth at the tertiary level. The formal education system begins with six years of compulsory primary education, followed by three years of middle school, and another three years of high school--either academic or vocational. High school graduates have the options of attending a two-year junior college or a four-year college or university. Alongside the standard educational stream are a variety of civic schools, miscellaneous schools and other educational options, (e.g., a system of vocational training institutes under the Office of Labor Affairs which offers one-year courses for middle school graduates). Finally, pri- vate academies teach a variety of courses. Table 1 Korea: Dimensions of Formal Education System, 1975 Number of Number of Number of Student/ Schools students (000) Teachers Teacher Transition (% private) (% private) (000) Ratio Rate (%) Primary School 6,367 (1.3) 5,599.1 (1.2) 108.1 51.8 77.2 Middle School 1,967 (36.6) 2,026.8 (40.6) 46.9 43.2 74.7 High School General 673 (53.0) 648.1 (60.4) 20.4 31.8 41.5 Vocat. 1/ 479 (43.8) 474.9 (52.4) 15.3 31.0 8.8 Junior College Vocat. 1/ 88 (61.4) 42.5 (71.8) 2.6 16.8 6.5 Others 2/ 26 (38.5) 12.3 (30.9) 1.0 13.0 20.3 4/ College and University 3/ 72 (79.2) 209.0 (72.8) 10.1 20.7 6.5 Source: Ministry of Education 1/ Including one Junior Technical College. 2/ Junior Colleges and Junior Teachers' Colleges. 3/ Excluding Graduate Schools. 4/ Junior Colleges only. -2- 3. Dropouts and repeaters are negligible at both the primary and secondary levels of education. In 1975 nearly four-fifths of primary school leavers proceeded to middle schools; and three-quarters of middle school graduates went on to high schools, (43% to academic, 29% to vocational or comprehensive streams, and the remainder to miscellaneous schools). 4. The general high schools provide a relatively standard program of study, but there are six main types of vocational high schools, namely, commer- cial (190,000 students 1/), technical (124,000), comprehensive (89,000), agricultural (42,000), fisheries/marine (8,000) and arts (2,000). About 20,000 students were enrolled in other high schools, including mixed types. 5. Junior vocational colleges, catering mainly to general high school graduates, are designed to produce "advanced technicians" or "junior engineers." The two-year program is usually terminal. Until a few years ago many of these schools were called junior technical colleges, and offered a five year post-middle school program. The first three years were the equivalent of a technical high school education, and the last two years were junior college level training in engineering subjects. But following a Bank recommendation, by 1975 only one school was accepting middle school students into the old junior technical college program. Five types of junior vocational colleges exist: engineering, agriculture and forestry, fisheries and maritime, medical and pharmaceutical, and "others." 6. Junior colleges and junior teachers' colleges also offer two-year courses. Their importance has diminished markedly over the last few years. There has been discussion of a plan to convert all non-specialized junior colleges into junior vocational colleges, but no decisions have yet been made. 7. There are 72 four-year colleges and universities, with more than 1,400 academic departments, and 210,000 students. The largest proportions are majoring in engineering (21.2%), social sciences (18.9%) and teacher training (14.9%). More detailed statistics on the breakdown of students by area are given in Annex 1. 8. Primary education is given almost exclusively in the public sector, but private enrollments account for about half of secondary students and nearly three-quarters of tertiary level enrollments. This distribution is a consequence of (a) strict governmental control of general tax support for educational expenditure, and (b) priority for basic education, in the face of (c) continuing heavy demand for post-primary education services. Thus a large proportion of education/training--both public and private--is financed by user fees. (See discussion below). 9. In addition to the five main levels of education, there are a variety of other institutions under the Ministry of Education. These 574 schools are summarized in tabular form in Annex 2. There are also 3,000 private institutes offering instruction in a wide variety of vocational and liberal arts areas to a total of about 250,000 students. 1/ All data refer to 1975 unless indicated otherwise. -3 - 10. Despite the continuing stress on meeting the skill needs of rapid industrialization, agriculture receives more attention than in most developing countries. Agricultural education in the formal school system begins in the fifth grade with an exploratory course, continues in middle schools where 15% of the curriculum is officially allocated to vocational components (which in most rural areas means agricultural education), and subsequently in agricul- tural high schools which encompass ten major departments, including agronomy, forestry, livestock, agricultural machinery, agricultural home economics and food processing. 11. Government financed non-formal education in agriculture is oper- ated through the Office of Rural Development. The ORD is responsible for coordination and administration of the overall national program, preparation of materials, etc. The City and Provincial Offices of Rural Development also coordinate, administer and supervise research. Below these supervisory agencies are the on-line extension centers which provide direct services to farmers, the city and county Offices of Rural Development (about 130) and the Myeon Offices of Rural Development (almost 1,400). Of the 7,100 extension workers who staff this system, approximately two thirds are high school graduates and one third college graduates. Most of the college graduates work in higher level administrative. jobs, so that the vast majority of personnel in contact with farmers are high school graduates. 12. Other non-formal education concentrates mainly on vocational train- ing for industry. The Vocational Training Institutes (VTIs) are under the jurisdiction of the Office of Labor Affairs (OLA). They teach middle school leavers in a one-year course--usually for a trade at the lower end of the range of skilled worker occupations. They also organize several other courses of different durations, (e.g., for supervisors or technicians). This training system appears to be a flexible and efficient instrument of skill production, but it is still at an early stage of its development: a nucleus of two VTIs (one specializing in instructors' training) is presently being expanded to sixteen. The planned eventual size of the VTI system will be 24 institutions with an annual training capacity of about 20,000. This network is supplemented by 7 provincial, 8 rural, and 34 private vocational training facilities; most of the latter are at a lower level of technological complexity. Management and Finance 13. Considering the size and sophistication of Korea's educational sys- tem, a relatively few officials in the Ministry of Education itself and in the Provincial Boards of Education administer the system. Given the generally satisfactory operation of the schools, this seems to imply an efficient divi- sion of labor between the central administration, its provincial outposts, and the schools themselves. Some of the major functions of the MOE central office are general supervision of the entire system, operation of national schools, establishment of curriculum for all levels, compilation and produc- tion of elementary school texts and approval of all other texts, long and short range educational. planning, evaluation and program development, prep- aration of the annual budget, allocation of funds to local educational authorities, and regulation of overseas study. There are 281 staff members -4- in the MOE central office; 67 are "special officials" with expertise in spe- cific areas, 172 are regular civil servants who have passed the civil service examination, and the remainder are clerical and maintenance workers, drivers, etc. 14. The main functions of the eleven City and Provincial Boards of Education are the general supervision of primary and secondary education in their regions, and local educational budgeting and planning. The Boards of Education are staffed by a total of 1,545 employees, of whom 285 are "special officials" and 748 are general civil servants. 15. Financial arrangements vary at the different levels of education. In 1975 total government and private school expenditure on elementary educa- tion amounted to about W 141 billion (US$280 million) or approximately US$50 per-pupil. At least 80% is being provided by the regular government allo- cation 1/ to each public elementary school. The local Parent-Teachers' Association is authorized to collect an amount of at least W 4,200, but no more than W 7,200, to be spent at the discretion of the principal with the support of the parents. Usually about half of the funds collected by the PTA is used to augment teachers salaries and the rest for purchase of equip- ment or upgrading facilities. The level of private contributions (in the form of entrance fees, tuition, contributions to school support, student self-government and experimentation funds, and examination fees) increases in middle and again in high school. Tuition levels at vocational high schools are only slightly higher than those in general high schools, though it is unlikely that recurrent costs are the same at both types of schools. 16. For the public education system as a whole, the largest proportions of educational expenditures are derived from general tax revenues, followed by tuition and fees. About 70% of the revenue of local educational authori- ties (City and Provincial Boards of Education) are received in the form of local education grants from the central government. Another 20% are collected in the form of rents and fees, which include tuition; the remaining 10% are from miscellaneous sources. For private schools, 88% are collected in rents and fees; only 3-4% are received as "aids and subsidies", and the remaining 8-9% come from miscellaneous sources. (It is not clear exactly what propor- tions of the Board of Education budgets received from the central government go to finance primary education, and what percentage is used to supplement the secondary school expenditures not met by tuition.) 17. In recent years, the MOE budget has constituted from 15.7% to 18.9% of the total government budget. Over the 1970-1975 period, total MOE expendi- tures increased in nominal terms by 264% (from W 78 billion to W 207 billion), of which more than half was due to cost increases. Educational expendi- ture as a share of GNP is estimated to be 5.6%; public expenditure accounts 1/ Because of the format in which educational finance data are reported, it is difficult to calculate per-pupil expenditures or mode of financing for individual levels of education. The above figure is a gross estimate. - 5 - for a bit over one-half of this. The MOE's share of public recurrent expen- diture, and total public expenditure on education as a share of GNP, are both low in terms of international comparisons due to the important role of fees in aggregate educational expenditure. 18. For public primary and secondary schools the budgeting process for recurrent expenditures is as follows: A standard expenditure per-class and per-school is decided upon at the central MOE office, and the required funds are allocated (in turn) to the Provincial Boards of Education, the city and county education offices and the individual schools. Teacher salaries are paid directly from the City and Provincial Boards of Education to the indi- vidual teachers, and other expenditure categories are allocated to the prin- cipals of the schools. Capital expenditure projects are decided on by the City and Provincial Boards of Education. The funds made available by the MOE are allocated to specific projects according to a set of informal priorities. Private schools are financially independent, and receive very little subsidy from the central government. They are, however, constrained to charge no more than the maximum allowable tuition and fees, and the MOE determines how many classes they must operate and the maximum number of pupils per class. (See Annex 3.) Goals: Economic and Educational 19. The main developmental goals of the Fourth Five Year Plan, 1977-81 (FFYP) are (a) growth with enhanced self-sufficiency, (b) equity and social development, and (c) efficiency and (higher) productivity. The goals for the education and training system simply reiterate the above since "education is considered as a means to provide the quality of human resources to meet the manpower requirements of the modernized industries of the nation." While other, wider educational objectives are alluded to, none are mentioned in the FFYP. 20. In pursuit of the above, a number of supplementary educational goals and strategies are noted. Quality/efficiency will be sought by reducing class sizes, providing free textbooks, and eliminating fees at the primary level. At middle schools, the enrollment ratio will be raised to 90% and half of per- sonnel costs at private schools will be covered by government. In the high schools, vocational subjects will be added to academic streams and techni- cal schools will be expanded. Tertiary level quotas will be raised by the MOE, and the certification function at this level de-emphasized. 21. Given the narrow focus of educational objectives in the FFYP, the question of divergence between socio-economic goals and educational ones does not arise. Nonetheless, the logic and consistency, as well as recent per- formance, of Korea's education and training programs are treated in more detail in the sections below. -6- II. THE PERFORMANCE OF THE EDUCATIONAL SYSTEM Growth and Equality 22. The first six years of education are compulsory, and attendance is essentially 100% of the age group. At the middle school level, enrollments have increased dramatically over the past decade, (147% from 1966 to 1975), and in all provinces a majority of the age group 12-14 now attends school. Part of this increase reflects the post-war baby boom, part can be attri- buted to higher incomes and the derived (private) demand for middle school education, and another major factor was abolition of the middle school entrance examination. 23. Academic high school enrollments have shown similar growth, 149% from 1966 to 1975, though the largest portion by far--58%--occurred in the last two years of the period. Again, part of this growth can be attributed to increases in the age cohort and in family incomes, while the spurt in the last two years reflects a shift in the entrance examination system. Techni- cal high school enrollments, too, have been rising rapidly, (172% during 1966-75); but this 12% annual growth rate has been halved for the past two years, apparently in response to growing employment problems. 24. Tertiary level growth rates have been very mixed in the past decade. Junior technical colleges hardly grew (see para 5) while JVCs went from negligible enrollments to 40,000 in just five years; junior teacher training college enrollments have remained stable at around 8,000, and other junior colleges declined to minor proportions. Four-year colleges and uni- versities dipped briefly during 1966-68, but their enrollments have since been rising at nearly 8% annually; graduate school enrollments have been growing steadily at 13% annually. Overall, tertiary level enrollments have been up about 6% annually since 1968. (See Annex 4.) 25. Before abolition of the middle school entrance examination, primary graduates competed for admission to a specific middle school, and entrance to one of the elite schools went far to insure success in life. In order to reduce scholastic pressures on fifth and sixth graders and to counteract the elitism inherent in the system, the government abolished the examination in 1974 and took steps to equalize the quality of all middle schools--both public and private--within each district. A continuing student is now assigned at random to a middle school in his or her district, and tuition levels have been equalized between public and private middle schools. The high school entrance system was also changed (in 1974) along the lines of the reforms at middle school level. This policy change was accompanied by a large increase in the admission quota for academic high schools. Thus the examination has not been used as an instrument for suppressing private demand for high school education. 26. The college admissions system is somewhat complex, but the Ministry of Education regulates overall numbers in two ways: it sets a student entrance quota for each department of each school, and operates the Preliminary College Admissions Examination. The MOE decides how many students will pass each - 7 - year. This figure always exceeds 100% (usually by 30-40%) of the freshman quota for all four year colleges and universities. Each high school grad- uate who wishes to attend a four year college applies to a specific department of a college or university, and then takes that school's admissions examina- tion. The most prestigious universities, including all the national univer- sities, give their examinations, on the same day. After the results have been reported, the "second grade universities" give their examinations, and so on through the "third grade universities". Students who fail to enter the top universities may either compete to enter "second or third grade universities" or study for another year and try again for the school of their choice. Many students and their families feel that an extra year (or even two or three) of study after high school is a worthwhile investment if it leads to admission to a prestigous school. This gives rise to the problem of "queuing", involv- ing large numbers of young males who are not in school and not employed, but are waiting to repeat the admissions examination for the school of their choice. 27. Educational opportunities generally, in Korea as elsewhere, remain more heavily concentrated in large cities--paralleling the differences in incomes between urban and rural areas. But primary education is universal and compulsory, so the only relevant question at this level is whether the quality of public schools is uniform across the country. (Private enroll- ment is small enough to be considered insignificant.) Two indirect measures of quality which are available, class sizes and the number of teachers with 14 or more years of education, give a slightly contradictory picture: classes are larger in the metropolitan cities, but the proportion of teachers with more experience is also greater in the larger cities. 28. Differences in opportunities become more apparent when considering advancement ratios to secondary and higher education. On all levels the advancement rate in the heavily urbanized areas (Seoul, Busan, Gyeonggi) is considerably higher than the rate in the most rural provinces (Jeonranam, Gangweon). And coefficients of variation among cities and provinces for the proportion of graduates, advancing to higher levels of education (0.11 at the first level, 0.14 at the second, and 0.21 at the third) indicate that this type of inequality increases with educational level. Apart from this, most Korean and foreign observers conclude that the quality of teaching for crucial subjects varies widely among secondary schools, and is significantly better in urban than in rural areas. The policy reforms noted above for secondary schools, which are designed to reduce unevenness in quality, appear to have been relatively successful on an intra-provincial level, but have not signi- ficantly reduced inter-regional inequalities. The measures contemplated by the MOE at present concentrate on higher education, through the expansion and upgrading of provincial universities. But this will have only a limited effect unless supplemented by a policy of equalization at the preceding, secondary level. (The FFYP investment plan for education does not give an indication of the regional breakdown for middle and high schools.) 29. In terms of social groupings, three underpriviliged categories are evident: the rural poor, the urban poor, and women. The greatest concentra- tions of poor people are in remote mountainous areas and islands. Schools in - 8 - such areas receive various subsidies from the central government, and this constitutes a workable mechanism for alleviating the problem. There are civic schools and higher civic schools which provide educational opportunities for those unable to attend regular schools, but these institutions receive rela- tively little government support. Discrimination against women is of an indirect nature, and occurs mainly outside the educational system. While slightly fewer girls than boys advance from each level of education to the next, there are no paths to educational advancement that are officially closed to women. 30. On balance, the inequalities in educational opportunity in Korea are smaller than in many other countries. It is unlikely that the structure or other characteristics of the eucational system are major causes of dif- ferences in educational attainment or economic development among regions. In fact, education appears to be more evenly distributed than other measures of economic welfare. Educational Quality and Efficiency 31. Primary education in Korea is currently undergoing a major reform. A new curriculum has been designed and new teaching materials have been pre- pared. The widespread use of educational television, more flexible class sizes and team teaching techniques are also under consideration. 32. Primary school teacher qualification is adequate in most cases. About 34% of the 1975 teaching staff were graduates of Junior Teachers' Training Colleges, with a two year post-secondary program. Another 32% were graduates of the old normal schools which provided a three year high school level program. The remainder received their training in special centers or passed the certificate examination after study on their own. 33. All middle school teachers are expected to have four years of college training. They must be qualified in a specific subject area and have a minimum number of credits in pedagogical courses. At present 27% of the stock graduated from colleges of education, while 54% majored in non-educational fields and later received teaching credentials in a special pedagogical course. 34. The rapid growth in enrollments has placed pressure on middle school facilities. There is a classroom shortage in many areas, and libraries and other special classrooms have been converted to regular classrooms. This limits the variety and flexibility of the middle school program. 35. In general high schools 89% of the teachers are graduates of four year colleges. By contrast, the qualifications of technical teachers in voca- tional high schools have been the subject of some controversy in recent years. It appears that the crafts skill level of current teachers in technical high schools is inadequate. (The situation appears to be somewhat better in com- mercial high schools where a large part of the.curriculum is academic and even the vocational courses are quasi-academic, and in agricultural high schools.) The largest proportion of teachers of vocational subjects at technical high - 9 - schools are engineering or vocational department graduates. Vocational edu- cation departments in engineering colleges or colleges of education produce a total of almost 1,100 graduates per year. However, until recently most of them took jobs in industry rather than in vocational high schools. At present the curriculum in vocational education departments calls for a. three month internship in industry, which is deemed inadequate by most observers. 36. The government's current response to this situation is to plan the centralization of all vocational high school preparation at a new and ex- panded department at Chungnam National University (Daejeon). The faculty of this department is currently working on the design of a new curriculum for vocational teacher education. So far, however, the basic structure of the preparation, a four year college program for high school graduates, has not been significantly modified, nor the period of internship extended. 37. Most of the 10,000 faculty members in colleges and universities hold advanced academic degrees (67% with M.A.'s or Ph.D's), and a significant proportion of these advanced degrees were obtained abroad. 38. The endowment of schools with appropriate facilities and equipment varies both within and among levels. In primary education, the average class size in large cities is close to 70 students, and in smaller cities and rural areas Is close to 60 students. 39. The rapid enrollment expansion in middle and high schools has strained physical facilities to some extent, although average school building area per student did not deteriorate significantly over the last five years. For vocational high schools, such difficulties are compounded by the lack of adequate equipment, particularly in private institutions. 40. The format of educational expenditure data does not permit the systematic calculation of per-pupil expenditure by level and type of educa- tion. But unit costs appear moderate due to large class sizes and compara- tively low teacher salaries. Apparently these forms of economizing have not markedly affected the quality of education: dropouts and repetitions 1/ are almost unknown, and the complaints about inadequate preparation of students (e.g., in science and mathematics) often voiced by the next higher level of education in other countries are not heard in Korea. In the absence of detailed relevant data, it appears that the internal efficiency of Korea's education system is generally good. External Relevance of Education 41. Evidence on this aspect of the education system's performance is scarce and circumstantial. At the highest level of aggregation, it seems clear that the system has helped, rather than harmed, the impressive perfor- mance of the economy'during the past three five-year plans, since the main natural resource being exploited was labor. Partial evidence from rate-of- return analysis further suggests that both aggregate investment and balance 1/ There is no policy of automatic promotion. - 10 - among levels have been roughly appropriate until recently. The overall rate of return in 1971 was estimated at about 10%; middle school was 8.2%, high school 14.6% and college 9.3%. The signals returned by employment rates for graduates of different levels are ambiguous (see Annex 5). While unemployment rates 6 months after leaving school tend to be higher beyond middle school, the residual category "others and unknown" is so large that comparisons cannot be made among post-middle school levels. It is clear that unemployment among young people is rather high, in spite of generally favorable economic condi- tions. But it is not clear what role education has played in this situation. Imperfect knowledge or unrealistic aspirations are only partly the fault of education, as is excessive "queuing" for tertiary level places. (But all of these problems can be at least partially mitigated by more extensive vocational counselling in schools, and improved access to labor market information.) 42. Another approach for assessing economic relevance is through sur- veying the views of consumers, viz., employers and workers. This has been done for some parts of the middle level skill formation system. Despite the comparative weight of technical high school enrollments, and their relatively high investment costs, a KEDI survey found that a subtantial majority of employers prefer, for lower skill occupations, middle school graduates with a year of experience (or vocational training); academic high school graduates with a year of O-J-T were also preferred to technical school graduates for these occupations. (THS graduates are, however, peferred for higher skill jobs.) Among students, both technical high school and VTI graduates com- plained of inappropriately equipped shops, and inadequate practical knowledge and experience. Quality appears as a greater problem than quantity. 43. The familiarity and intractability of these complaints does not lessen their importance. At the same time, these and similar problems do not seriously detract from the impression of an education and training system which is sensitive to the needs of the economy. Non-economic objectives and relevance of the system have not been explicitly considered in the FFYP. III. GOVERNMENT PLANS FOR THE EDUCATION SECTOR The Formal System 44. The major government investment plan for primary education under the Fourth Five-Year Plan for economic development (FFYP) is to reduce average class size nationwide from the current 57 to 51 by 1981. Class sizes in large cities will decrease from 71.2 in 1977 to 60.0 in 1981. The total cost of this program will be W 296 billion, or about US$600 million. This is by far the largest single education program in the five year investment plan. 45. In the early stages of FFYP preparation, some consideration was given to making middle school education compulsory during this plan period. But it was decided that compulsory (i.e., free and universal) middle school was too expensive at this time. Instead, a target enrollment rate of about 90% nationwide was set for 1981, up from 75% in 1975. At the same time average - 11 - class sizes will decrease from 63.3 to 59.5 nationwide. The total planned investment required to meet this target will be W 145 billion, or about US$300 million. (This amounts to US$1,800 for each of the 160,000 new student places.) About 9% of the planned investment will be private funds invested in private schools. 46. The FFYP also calls for a large expansion of general high schools. Over the plan period enrollments will rise at about 8% annually, and the participation rate will increase from about 27% to about 35% of the group aged 15-17 years. The total cost of the program will be about W 5 billion, or US$102 million. This implies a cost of US$878 for each of the 120,000 new student places. (It is not clear why this figure should be so much less than per student costs for middle school expansion.) Almost two-thirds of the planned investment are expected to be private funds invested in private schools. 47. The plan allows an increase of 42,000 student places in vocational high schools, about 30% of which will be in agricultural, fisheries and maritime high schools, 45% in heavy and chemical industrial fields and 25% in light industrial fields. The total cost of the investment program will be W 121 billion (including the 1976 investment allocation) or US$250 million. These figures amount to between $5,000 and $6,000 per student place. The proportion of the high school age group enrolled in this type of school will rise from 16.6% to about 18% by the end of the plan. (It is not clear what is expected of public-private shares.) 48. The educational investment plan foresees a continuation of the relatively rapid rate of increase of junior vocational college enrollments. A total of 37,000 new student places are planned, roughly half of them in the area of heavy industrial and chemical engineering, 15% in light industrial engineering and the remainder in miscellaneous types. Over the past five years total enrollments at junior vocational colleges and junior technical colleges have increased by 159%, considerably more than the 64% increase planned by 1981. The capital expenditure required for this expansion is W 96.8 billion, or US$200 million. This amounts to US$5,000 to 6,000 per student place, approximately the same as for technical high schools. An additional W 15.1 billion, (US$30 million) has been allocated for upgrading facilities in existing junior vocational colleges. Almost one fifth of it is expected to come from private sources for investment in private schools. 49. The planned increase during the FFYP for colleges and universities is almost 40,000 student places. This amounts to an 18% increase in enroll- ments, most of it outside Seoul. By 1981 9% of the age group is expected to be enrolled in these institutions. Capital investment in the amount of W 74.7 billion (US$150 million.) is anticipated, with more than one-third deriving from private sources. The investment plan implies a cost per student place of US$3-4,000. - 12 - 50. In addition to this expansion, funds will be invested in improving national universities in the provinces. The upgrading plan calls for an investment of W 39.0 billion (US$80 million) for improved and expanded facilities for these schools. Another W 15.8 billion has been allocated to promote specialization of the engineering faculties at four of the provincial universities. Non-Formal Vocational Training 51. The government plans to meet about 30% of skilled manpower require- ments for the FFYP through technical high schools under the MOE. The remain- ing 70% will be the responsibility of the Office of Labor Affairs, either as trainees of Vocational Training Instituties or as participants in on-the-job training programs (OJT). 52. By 1981, 24 Vocational Training Institutes will be in operation. One of these, the Central Vocational Training Institute (CVTI) in Incheon, may be upgraded to junior college status to be solely concerned with prepar- ing instructors for other VTIs and for in-plant training programs. Another specialized VTI, the Busan German-Korean Vocational Training Institute; will offer a two year program designed to produce manpower at higher skill levels than the average VTI. All of the remaining institutes will organize flexible training programs,' the large majority of one year's duration. The total capacity of the VTI system will be slighly less than 10,000 trainee places, but the total number of graduates each year will approximate 16,000 through double-shifting. The cost of construction and equipment at the VTIs is approximately US$7,000 per place, though the cost per trainee is considerably smaller when taking into account multiple shifting. Recurrent expenditures are estimated at W 230 million per year, or slightly less than US$500 per trainee. 53. The government plans to transfer control of the VTIs from the OLA to a series of juridical bodies, one for each of the VTIs. The government would still maintain a high degree of control through membership on the board of directors, but this new administrative structure would allow the VTIs to pay salaries above regular civil service scale, and thereby attract more highly skilled teachers. Industry participation on the board of directors would also allow closer coordination of industrial training and manpower needs, and might encourage private firms to provide financial and in-kind assistance to the VTIs. 54. VTI trainees will account for just under a third of the skilled manpower requirements which are OLA's responsibility. The remainder will be produced through in-plant training programs. This training is expected to expand rapidly over the next few years under the pending In-Plant Training Law, which requires that firms with more than 200 employees provide pro- grams of in-plant training for 10% of total employees. The required training period will depend on the specific type of firm and skill involved, but is expected to last from 3 to 18 months. On-line supervisors (foremen, etc.) will act as instructors. They will provide basic training, upgrading, retraining, and adaptation training. - 13 - 55. Firms which do not provide the required amount of training will contribute to an Industrial Training Levy. For each type of :firm and occu- pation, the OLA will determine a basic per-trainee level of expenditure. Firms which are not training the requisite number of employees will be taxed in the amount that they "should" have spent on in-plant training. The pro- ceeds of the levy will be spent at the discretion of the Director-General of OLA (with the approval of the President) on programs related to vocational training and manpower development. The Ministry of Finance and the Government Manpower Development Committee are at present considering possible tax reduc- tions to help firms defray the cost of in-plant training. OLA is also plan- ning to provide technical support for in-plant training in the form of train- ing manuals and guides. Current plans foresee an increase of 34 staff members in OLA to help operate this program and the industrial training levy. IV. OTHER ISSUES IN EDUCATIONAL DEVELOPMENT Class Size in Primary Schools 56. The latest version of the FFYP investment plan for education calls for a reduction of average class sizes to 60 in the largest cities and approx- imately 51 nationwide. The estimated cost of this program is US$600 million, or about $100 million for each drop of one in average class size nationwide. The total would exceed the planned MOE investment in all of vocational educa- tion, yet it is not certain whether the benefits of such a reduction in class size will be significant. Further, KEDI is at present in the final stages of preparing a new system of instruction for elementary schools which includes new teaching materials, intensive use of media and such innovations as flexi- ble class sizes and team teaching. It does not appear that smaller classes would necessarily be required for this new system. Until this and other studies (see Bank program below) are completed, it may be worthwhile to con- sider a less costly alternative, e.g., teachers with above-average student loads would receive incentive payments, (proper.care being taken to monitor the quality of their teaching). School Fees 57. Reliance on wide-ranging, and high, tuition and other fees to finance a large part of education and training is a distinguishing charac- teristic of both public and private schooling in Korea. This is basically a response to aggressive private demand which has outstripped government's ability (or willingness) to provide, without charge, all the facilities desired. At present, fee supported private schools provide the greater part of all post-middle school places. But if the fees and entrance qualifications of private schools are both (a) controlled and (b) essen- tially the same as public schools, the only remaining difference is administration--which need not be significant. 58. Since there is no evident underinvestment in education, financing by user fees appears desirable in Korea--unless equity costs become socially intolerable. If this occurs, then user fees can still be employed by insti- tuting a universal loan scheme, with mandatory repayments. This will serve both to cover costs and to remove finance as a barrier to qualified - 14 - applicants who wish to pursue schooling for (mainly) economic purposes. A second best approach to full-cost coverage would be a fee-cum-scholarship scheme to accommodate the needy. Thus, popular opinion to the contrary, there does not appear to be a strong case at this time for replacing, or substantially lowering, user fees with general tax support of high school and tertiary level education. The same can be said of pressures for rapid expansion of public school enrollments at these levels, which is an equivalent move. Compulsory Middle School 59. The government does not intend to introduce compulsory middle school- ing during the period of the FFYP. However, the target of 90% enrollment for 1981 means that middle school will be, de facto, almost universal. The difference between the two would be financial in that the entire cost of com- pulsory education would fall on the government; under the current plan the parents of middle school students will bear most of the recurrent costs, and only part of the capital costs will fall on the general taxpayer. The latter seems preferable, for the reasons cited above. Industrial Skill Aquisition 60. Projections indicate that the demand for scientists and engineers will be met or exceeded, and that some effort will have to be made to produce enough technicians and skilled craftsmen. The major sources of the latter in the formal system are the junior vocational colleges. An expansion of this subsector is planned, but the production of skilled craftsmen brings up a number of issues. 61. Most estimates of the demand for skilled workers (or in Korean terminology, "skilled craftsmen") indicate that somewhere between 1,000,000 and 1,500,000 will have to be produced over the next five years. Depending on the skill mix of this (imprecisely defined) category, different approaches toward training will be needed. Research done at KEDI implies that the bulk of demand is for workers who can perform a large variety of very basic, simple skills with a high level of dexterity, rather than one or more complex high level skills. This implies that on-the-job training needs will be relatively greater than formal, in-school training facilities. 62. Another issue related to vocational training is the role of techni- cal high schools. The growth rate in this sector has decreased considerbly in the past few years, and the FFYP aims at a continuation of the slow growth policy. There are three major problem areas related to technical high schools. First, in many schools shops are crowded or inefficiently used, and stocked with inadequate and outdated equipment. (World Bank loan programs have re- equipped and upgraded about 30%-40% of the facilities in the technical high schools.) Second, the qualifications of teachers are inadequate, especially in the areas of shop skills and on-line production experience. Because of salary differentials, it is difficult to attract skilled craftsmen into the teaching profession. Third, there are concerns about the balance between theoretical and practical training in the technical high school curriculum, - 15 - with considerable uncertainty about the principal function of these schools. This uncertainty is both a reflection and a cause of an uneasy educational compromise, viz., between a more flexible and general (although less prac- tical) content at a higher level of complexity, and more rigid and thorough approach to a more limited training task. The VTI's are a cheaper way of producing manpower with a specific skill, but VTI and THS graduates are not perfect substitutes in the long run. Hence the appropriate balances of output between the two is a continuing question, in spite of present moves toward relatively more reliance on VTI's. 63. The bulk of skilled manpower to be produced during the FFYP period will be trained on the job. However, some government subsidy may be necessary in order to induce a sufficient amount of training. The introduction of a tax-subsidy system to encourage in-plant training is a very complex under- taking with inherent employment risks, as in the case of any payroll tax. Since the specific legal requirements for acceptable training programs, and methods used to compute training costs, can have significant effects on the type and quality of programs, a gradual introduction of these new policies recommends itself. Teacher Salaries 64. Recurrent expenditures of the Ministry of Education are expected to rise dramatically during the FFYP, from less than a fifth to nearer a quarter of public recurrent expenditures. The largest element in this rise reflects the proposed salary increases for teachers. Since these salaries account for about two-thirds of the projected recurrent budget for education, they are of considerable importance to the whole government budget. The pro- posed increase appears to be generous as teachers are not now among those government employees whose salaries are significantly below those paid in comparable private sector employment. Nor is there a teacher shortage, (except among suitably experienced instructors for vocational training schools); the reverse is true at primary level. 65. Wage increases of the amount proposed also will have a considerable effect on the viabiity of private schools, and expected private investment in secondary schools may not occur. Government may in turn be forced to permit a substantial rise in tuition fees, or to introduce subsidies to private high schools. Pressure to allow private schools to reinstate examinations and charge higher fees will grow. To accede to this pressure would be a step back from the egalitarian system that exists at present. These matters are impor- tant enough to justify much further analysis of teacher salaries, perhaps in the context of a general pay study for all Government employees. Growth of Academic Hiah School and College Enrollment 66. At present approximately 40% of the high school age group 15-17 attend either academic or vocational high schools. According to the FFYP this proportion will rise to 60% by 1981, in consequence of the expected 80% advancement rate for middle school graduates. Most of this increase will be in academic high schools. This is less an organized plan to encour- age high school enrollment than an expansion of facilities to meet expected - 16 - private demand. However, high school enrollments in Korea are already relatively large, given its level of economic development. The proportion of 16-year olds enrolled was 47.4% in 1975, compared with 32.7% for Singa- pore (1972), and 40.4% for the U.K. (1970). While social returns on high school investment still appear to be moderately good, the prospects are not. Male graduates of academic high schools already have difficulty finding jobs, and there is no indication that the economic demand for academic high school graduates will expand sufficiently both to take up the slack in the current market and to absorb the increased number of graduates. Further, there is a large stock (its exact size being unknown) of academic high school graduates who have failed to enter the college of their choice and are waiting to try again. 67. The government's response to these problems has been, and will be, to increase college enrollments. Here again, a relatively high enrollment ratio has already been reached: almost 10% vs. 6% in Mexico and 15% in the U.K. And there is no evidence that the demand for college educated manpower will expand at the same rate as the enrollment increases envisaged. Thus an alternative approach would be to limit the growth in high school enrollment through the mechanism of the national High School Qualifying Examination, (or by reinstituting the old high school admissions examination). Another would be to-reduce severely the growth in public high school enrolments, (while ensuring a geographically fair distribution of public facilities). The res- idual demand would then be shifted to the private scector, which would bear the burden of adjustment to market needs--as it has shown itself able to do. Some form of vocational training in the academic high schools would also be helpful, as would some way of identifying, before the third year of the cycle, those high school students unlikely to go to college. Brain Drain 68. The outflow of trained Koreans to other countries is not known with precision, and available statistics are somewhat out-of-date. The main des- tination in recent decades has been the United States, but even there the flow appears to have been moderate. During 1962-66 some 15,000 migrants went to the U.S., but less than a sixth of these had a profession. Viewed from the recipient side, Koreans accounted for only 2% of arriving scientists and engi- neers in 1970, and 7% of the doctors immigrating from developing countries. The flow of Koreans was only a quarter as large as that from the Philippines, (and one-sixth that of India). 69. Nonetheless, the educational investment costs of 3,000 immigrants annually with, say, 12 years of schooling, is approximately US$5 million. (The loss in terms of production foregone in Korea is impossible to calculate meaningfully, given unemployment levels at home, substitutabilities, and ignorace of the total stock of Koreans in America). Remittances from these immigrants are not known as it is difficult to separate them from the earnings of Koreans who are employed overseas by Korean firms. This more recent phe- nomenon, symbolized by the agreement between Iran and Korea (and the Philip- pines) to employ 90,000 migrant workers on short to medium term contracts, is an economically rational move which, effectively, broadens Korea's exports. - 17 - At the same time, its uncertain character confuses the demand for output from the education and training system. The problem of unemployed graduates is still visible and suggests that overseas demand has not mopped up domestic surpluses, and brain drain is probably continuing on at least a moderate scale. Thus, the possibility of "human exports" is not an economic justi- fication for expansion of the educational system in Korea. The only major market for such exports at present, the oil producers of the Middle East, will soon be sated with supplies from nearer, poorer countries than Korea. Management Education 70. There is a widespread network of programs in business administra- tion and management--in every part of the country, and including both even- ing courses and correspondence study. There are 61 institutions involved, of which 26 are universities, 19 are four-year colleges, and 16 are junior colleges. Only eight of the colleges and universities are public; the re- mainder enroll 87% of the 25,000 students in these fields. There are also some 80 institutes of management in the non-formal system, of which 21 are sponsored by the Ministry of Commerce and Industry and 15 by the Economic Planning Board; another 26 are attached to universities. But only a small number of trainees are involved, and for relatively short periods of time; the larger firms exhibit a strong preference for in-house training. 71. Quality in the formal system is less than satisfactory. Only a quarter of faculty have a Ph.D. or other terminal degree, and the student- faculty ratio is very high at 44:1. The IBRD-sponsored study by the Academy for Educational Development found that curricula are increasingly out of date, specialized libraries are limited, and access to computer facilities even more so. 72. In view of recent growth rates--about 10,000 managers a year being added to a (current) stock of around 140,000--as well the dominant role of private institutions in catering to market needs, the need for expansion of public facilities is not nearly so pressing as the need for upgrading quality. (An exception is the field of accounting, where there appears to be real shortage.) This upgrading is particularly important in view of the leader- ship role intended for a limited number of "centers of excellence" in the field of management education. Educational Aministration 73. A relatively small number of people are operating a large educa- tional system remarkably well. However, the procedures used for planning and budgeting provide little assurance that the resources made available for edu- cation could not be used more efficiently. While it is impossible to quantify even the order of magnitude of efficiency loss attributable to shortcomings of the management system, there seems to be a consensus that rather large losses do occur. This would warrant an upgrading of the managerial capabilities in MOE, the Provincial Boards of Education and those charged with administrative responsibilities throughout the educational system. It is possible that a relatively small investment in staff retraining and in data processing systems - 18 - could yield large returns in terms of cost saving. But there is not at pres- ent any specialized program of training available for educational admini- strators. V. THE BANK'S ROLE IN THE DEVELOPMENT OF EDUCATION AND TRAINING IN KOREA Previous and Planned Projects 74. The Bank's support of the education and training sector has consis- tently pursued the broad objective of technical manpower development, either through an expansion of the relevant segments of the educational system, or through specific quality improvements. While the first two projects were addressed to priority needs in various segments of the system (and were therefore somewhat heterogeneous), the third project included a major com- ponent aimed specifically at building up a new sub-system of vocational train- ing. This approach is expected to continue in the proposed fourth education project. 75. More concretely, the World Bank Group's first education project in Korea (1969) under Credit 151-KO (US$14.8 million equivalent) was designed to contribute to extension, and equipping of 27 technical, commercial and agri- cultural high schools, five post-secondary higher schools, four departments of education at the university level, and technical assistance to complement these project items. The project was reviewed by a completion mission in June/July 1976, and closed on September 30, 1976. It appears that the expec- tations for this project were fully met, if not exceeded (as evidenced by the intensive use of facilities and above-average labor market prospects of most of the school leavers). 76. The second education project (1973) under Loan 906/Credit 394-KO (US$43 million equivalent) consists of equipment and extension of buildings for 18 technical and 14 agricultural high schools, and in 43 post-secondary institutions in selected fields where manpower shortages had been identified. It also includes pre-investment studies in management and health education. 77. The third education project (1975) under Loan 1096-KO (US$22.5 mil- lion equivalent) will provide facilities and/or equipment for one fisheries college, three agricultural junior colleges, one merchant marine junior college, three fisheries high schools, one technical high school and seven vocational training institutes under OLA. As mentioned above, this latter component is a contribution to the establishment of a flexible type of non- formal training that would be undertaken in close contact with the client industries. 78. Support of this vocational training system would be continued under the proposed fourth project (estimated total cost US$49 million equivalent), with eight new VTIs as its main component. This project is scheduled for FY77. - 19 - Possible Future Education Projects 79. Korea presents a picture of a succeeding education and training system--one with a larger private contribution and heavier reliance on user fees than most. Basic education is universal, and all who wish will soon have access to 9 years of schooling. Both vocational-technical and higher education have established internationally impressive enrollment levels (and stocks of trained manpower), and have met with remarkable facility the rapidly changing needs of one of the world's most dynamic economies. This adaptability is a distinctive feature of the Korean system, and the heavy reliance on (public and private) user fees points up the private sector's central contribution to this adaptability, i.e., market forces have been a principal determinant of the structure of educational output. The basic problems of coverage and relevance which characterize many LDCs are past; the system's current problems are more sophisticated--but less pressing. 80. Economic analysis suggests that returns on educational invest- ment at most levels of schooling are well below the opportunity cost of capital, (and brain-drain is a continuing problem). A prudent course for Bank lending would not, therefore, involve funding expansion at any partic- ular level, and would only support program component expansion with consid- erable circumspection. Not only are requirements imprecisely known, the private sector has shown itself extremely responsive to emerging needs of the economy. The primary thrust of Bank lending will thus be in support of quality upgrading, in terms both of external relevance and internal effi- ciency, from primary through tertiary level schooling. This will be accom- panied by continuing attention to equity considerations; the widespread (and high) fees which accompany large classes and questionable facilities are all a direct consequence of the rapid growth and impressive coverage of the system in what is still a relatively low income country. 81. In terms of economic structure, the main object of the efforts to upgrade quality will be the present and prospective industrial work force. The preparation of a large force that commands basic skills, and the supply of manpower with specific technical expertise, is central to most of the project proposals which follow. Investment Area I: Vocational and Technical Education 1. Vocational Teacher Education Objective: to upgrade the practical skills of current vocational education teachers. Project Description: The program would consist of a one-year training sabbatical for two hundred vocational subject teachers per year. Six months of the sabbatical would consist of intensive skill training at a vocational education teachers' retraining center, and the remaining six months would consist of a factory internship. The cost of the program would involve the teachers salaries for the year and the construction, equipment and operation of the retraining center. By the end of five years about two-thirds of the current stock of vocational teachers would have been retrained in this way. - 20 - Cost Estimate: US$7-10 million. Remarks: This is only one--but possibly the most expeditious--of several possible ways of upgrading the quality of instruction at technical high schools. Priority: High Investment Area II: Higher Education 2. Upgrading and Expanding Provincial Universities Objective: to increase regional equity, to limit the concentration of population in the Seoul metropolitan area and to support regional economic development. Project Description: This potential project would have three major components: (a) Specialization of the engineering faculties at three pro- vincial universities: Busan National University would specialize in mechanical engineering; Gyeongbug National University (Daegu) in electronic engineering, Jeonnam National University (Gwangju) in chemical engineering; and, Chungbug National University (Daejeon) in vocational teacher education. The project would involve expansion of facilities, purchase of laboratory equipment and up- grading of faculty through fellowships. (b) In response to a number of government policies, enrollments at provincial universities have expanded in the past few years and will continue to grow rapidly. Facilities will have to be expanded to meet this rise, and faculty will have to be upgraded in order to attract the best local students away from schools in Seoul. (c) Basic science equipment for provincial teaching hospitals: While the quality of students and faculty is good at the medical colleges of provincial universities, many of the facilities are outdated and inadequate. The Korean gov- ernment has committed funds to build new hospital buildings. The potential project would help purchase new and more sophisticated laboratory equipment for the basic science courses in these schools. Cost Estimate: US$104 million (MOE five-year investment plan estimates). Remarks: The equipment component should focus on the support of teaching activities rather than of research projects. Priority: Middle - 21 - 3. Management Education Objective: To improve the quality of management education, particu- larly in a limited number of leading institutions, in support of increased production, sales and administrative efficiency in Korean industry. Project Description: Establishment of regional business libraries, provision of regional computer training facilities and other educational equipment, and support for accountancy training. Emphasis in the case of libraries would be upon acquiring current publications, rather than historical material. The computer facilities would link approximately 40 institutions with the computer center at the Korea Institute of Science and Technology. And the accountancy training would increase the output of this scarce skill. Approximate cost: US$5.2 million, of which a little over half would be for strengthening library facilities. Remarks: These inputs would be accompanied by a concerted effort by participating institutions to upgrade the quality of teaching staff through further training, exchange of scholars, etc. Priority: Middle 4. Upgrading Educational Management Objective: To improve decision making mechanisms in the education sector--Ministry of Education, Provincial Boards of Education, and school admin- istrators to insure that the massive flows of scarce public funds into this sector will be used in the most efficient manner. Project Description: Creation of a graduate faculty in educational management at Seoul National University, provision of technical assistance to planning and budgeting officials in the MOE and Boards of Education, intro- duction of computerized. management systems for cities and provinces. Cost Estimate: US$1.5 million. Remarks: MOE and other officials have sufficient general back- ground so that some intensive short-term retraining would enable them to use modern management techniques. Degree programs would also be considered. The project would help instill some of the dynamism that is evident in other sectors of the Korean economy into educational planning and management. Priority: Middle - 22 - Investment Area III: General Secondary Education 5. Middle School Skill Training Objective: to provide simple technical skills to all middle school students in order to upgrade the basic quality of the general work force. Project Description: KEDI is in the process of developing a curri- culum and teaching materials which will provide training in approximately 100 basic skills such as cutting, hammering, shaping, etc. The program is de- signed for use by teachers with minimal training in industrial education, and does not require elaborate shop equipment. The basic teaching device is the use of demonstration films followed by practice and feedback. The investment program would involve the production and distribution of teaching materials, construction of classrooms and provision of the basic equipment required for operation of the program. Approximate Cost: US$150 million. KEDI estimates that the pro- duction and nationwide diffusion of the software elements would require US$10 million and that the equipment would cost approximately four times that amount. An estimate of US$100 million to build the required number of classrooms has been used. Major elements of the program could go into operation without the construction of classrooms. Remarks: The government has committed approximately US$200,000 in a supplementary budget for materials development. To date programs for nine out of 100 skills have been developed. The methods that KEDI has devised are quite innovative, and the program should be of interest as an experiment for application in other developing countries. Priority: Low Sector Work 82. An important part of the quality problem in Korean education stems from limited knowledge of input-output relationships in the schooling process. At the primary level this has huge financial implications; the pursuit of quality upgrading by lowering average class sizes entails government expen- diture proposals of US$600 million during 1977-81, in the face of little knowledge concerning the efficacy of the intended changes. This combination-- substantive uncertainty together with massive expenditure plans--makes further review urgently desirable. An IBRD/Unesco mission should undertake such a review as early as possible in 1977, taking advantage of work already done in this area by, inter alia, KEDI and Florida State University. Insofar as data are insufficient to permit informed conclusions, the mission will make specific proposals for controlled experimentation and/or data collection to commence at once. Teacher costs would be within the purview of the mission. Approximately 4-6 man-months. - 23 - 83. There is considerable ambiguity in the content, and relative roles, of the technical high schools, VTIs and JVCs. This does not suggest either that all three are not needed, or that all overlap must be removed; but further study appears desirable on the cost-effectiveness of different ways for imparting basically similar skills, particularly since the first is widely criticized and the last is mainly a private sector operation catering to unsuccessful university applicants. An IBRD/Unesco mission should under- take this study, specifically examining possibilities both for combinations and greater specialization of functions among these training schemes. Approx- imately 6 man-months. 84. The importance of higher level technical manpower to Korea's devel- opment plans, the role of government in setting enrollment patterns, and the continuing proliferation of teriary level institutes all suggest the need for a careful review of higher education--both qualitatively and quantitatively. An IBRD/UNESCO mission should undertake this sub-sector study during 1977. On the qualitative side, attention should be given, inter alia,to the labora- tory training and other practical content of the programs, to the need for regional balance in the distribution of technical facilities, and to coordi- nating the course offerings of specialized institutes. Quantitatively, attention should focus on the government's role in determining fields of specialization in a context where change is rapid and the private sector (and individuals) have shown. themselves sensitive to shifts in the economic demand for schooling. Approximately 5 man-months. 85. The tax-subsidy program to encourage in-plant training is both imaginative and ambitious. It also carries with it a number of risks, not simply because of its ambitiousness, but because it will affect the relative costs of labor and capital in unpredictable fashion, will re- quire some reorganization of production processes, and influence the prerogatives of private. enterprises. But its scope and promise is such that insofar as it is successful, its components will have immediate interest (and applications) for a number of countries. An IBRD/Unesco mission in early 1978 should design a monitoring and evaluation system, including provisions for controlled experimentation in various economic sub-sectors and skill divisions. Approximately 2-4 man-months. 86. Finally, (if resources permit), the relationship between education/ training and economic development is not well understood anywhere; but there is a potentially very important dimension to the Korea experience. The rapid economic growth achieved in the last decade may or may not have been importantly abetted by investment in education. But insofar as it was, Korea has made use of relatively "cheap" education. The low unit costs are readily explainable: in terms of large classes, high pupil-teacher ratios, limited shops and laboratories, etc. An IBRD/Unesco mission should examine whether the relatively low inputs per pupil have significantly affected the quality of outputs in ways which either (1) impinge measurably upon economic performance, or (2) have deleterious results on important social goals. Approximately 8-10 man-months. i ANTEX 1 ENROLLMENT AT THIRD LEVEL INSTITUTIONS BY.FIELD OF STUDY, a 1965, 1970, 1975 Percentage Year An Annual Growth Rate Composition 1965 1970 1975 1965-70 1970-75 1975 Humanities 21,674 19,686 23,529 - 1.9 3.6 7.9 Education 12,339 27,932 45,212 17.8 10.1 15.2 Fine Arts 7,567 7,746 12,351 0.5 9.8 4.2 Law 6,789 6,006 6,218 - 2.4 0.7 2.1 Social Sciences 27,135 36,821 37,247 6.3 0.3 12.5 Natural Sciences 12,495 17,090 17,022 6.5 0.0 5.7 Engineering 26,929 49,784 73,743 13.1 8.2 24.8 Medical Sciences 12,256 19,332 29,248 9.5 8.6 9.8 Agzicultural Sciences 14,452 17,039 27,436 3.3 10.0 9.2 General - - 25,213 - - 8.5 Total 141,636 .201,436 297,219 7:3 8.1 100.0 Note. /a includes Junior Technical (Vocational) Colleges. Source: Statistical Yearbooks of Education. AITNEX 2 Miscellaneous Education and Training in Korea Type of Purpose No. of No. of Age School Schools Students Group (1,000) Miscellaneous A variety of specialized 15 3.0 above 18 Schools programs. Many in (College level) theology, sports and arts. Nurses training Two or three year 3 0.6 above 18 school program of nurses training Special Programs for the 49 6.5 6 - 17 Schools handicapped Civic School Elementary school 26 1.9 all ages program for those unable to attend regular primary schools, adult literacy. Higher Civic Middle School program 244 52.5 all ages School for those unable to attend regular middle school.' Trade School Skill training for 60 12.9 all ages elementary school graduates Trade High Skill training for 48 13.4 all ages School middle school graduates Miscellaneous Middle School program 37 8.2 12 - 14 Schools (Middle but not full accredited School Course) Miscellaneous High School program 92 62.5 15 - 17 Schools (High but not fully accredited Course) ANNEX 3 Korea: Range of Annual Fees, bLTyDe and Level of Education, 1975 (in Won) Type and Level First Year Student Other Students of Education Segment Maximum Minimum aximum inimum Primary School National & Public 7,200 1,200 7,200 1,200 Private 28,280 11,070 26,180 9,840 Middle School National & Public 59,910 37,420 56,310 34,720 Private 59,910 37,420 56,310 34,720 High School General National & Public 82,380 52,390 78,100 49,240 Private 82,740 60,790 78,100 57,640 Vocational National & Public 82,740 46,150 78,460 43,000 Private 82,740 60,790 78,460 57,640 Junior Vocational College National & Public 110,050 65,650 108,400 64,000 Private 270,000 126,400 235,400 116,800 Junior Teachers' College National - - - - Junior Vocational College Course Private 348,100 178,600 301,100 168,600 College and General National & Public 179,900 98,800 178,100 97,000 University Course Private 459,200 91,000 409,200 81,000 Vocational National & Public 205,300 104,800 203,500 103,000 Course Private 481,200 184,200 431,200 164,200 Source: Ministry of Education AnEX 4 GROUTH IN PRIVATE AND PUZLIC r":ROLLMENTS 1965-1975 Annual Growth 1965 1975 Rate % Primary Schools National and Public 4,916,527 5,529,314 1.2 Private 24,818 69,760 10.9 % Private 0.5 1.3 Middle Schools National and Public 418,059 1,203,560 11.1 Private 333,282 823,263 9.5 .% Private 44.4 40.6 General Hieh Schools National and Public 104,754 256,950 9.4 Private 149,391 391,199 10.1 % Private 58.7 60.3 Vocational Hizh Schools National and Public 103,0151/ 225,851 9.2 Private 71,883 249,017 14.8 % Private 41.1 52.4 Junior Technical '(Vocational) Schools National and Public 4,196 18,736 16.1 Private 3,427 39,764 27.8 % Private 45.0 68.0 Colleges, Universities, and Other Tertiary Institutions /1 National and Public 35,063 69,832 7.1 Private 98,950 168,887 5.5 % Private 73.8 70.7 Other Educational Institutions National and Public 12,465 8,002 -4.3 Private 84,350 149,925 5.9 % Private 82.4 94.9 Total /2 National and Public 5,596,200 7,312,245 2.7 Private 761,165 1,891,815 9.5 % Private 12.0 20.5 1/ Data are for 1966. 2/ Includes Junior Colleges, Junior ieachers' Colleges, 4-year Colleges and Universities, Graduate Schools, Miscellaneous Undergraduate Institutions, and Nurse Training Courses. 3/ Exludes Pre-Primary Source: Ministry of Education, Annual Survey of Education 1965 and Statistical Yearbook of Education 1975. AIN 5 Employment Status of Graduates, by Level and Type of Education, 1975 (in percent) Level and Type Employment Status Further Others and of Education Employed Unemployed Education Unknown Primary School 8.3 10.7 77.2 3.8 Middle School 5.2 11.3 74.7 8.8 General High School 9.7 25.7 41.5 23.0 Vocational High School 50.3 20.1 8.8 20.8 Junior Vocational College 45.1 11.4 6.7 36.9 Colleges and Uni- versities 1/ 53.8 14.0 6.1 26.1 Source: Ministry of Education 1/ Including Junior Colleges, Junior Teachers' Colleges, Colleges, Univer- sities, and Graduate Schools.