This research examines the economic situation in the Republic of Korea (South Korea) in late-1997. The economic situation in Korea in late-1997 did not develop overnight, although media reports frequently imply that such is the case. Rather, the current economic situation in Korea is the product of decades of social, political, and economic policy and management.
The Long-Term Development of the Problem
Important social goals of successive Korean governments have been to extend meaningful education to all citizens of the country and to provide high standards of health care for all citizens. The government also has sought to improve the economic welfare of all citizens.
A middle-class has emerged in Korea as the country has developed rapidly since the end of the Korean War. The professional and managerial classes in Korea are relevant in the contemporary period, as are business owners. The ranks of industrial workers also have grown rapidly. Women in Korea, however, continue to be denied equal opportunity in employment.
Korea has relied heavily on the development of human capital through education. In this approach, the concept of human capital is substituted for a raw population variable. In this model, human capital is defined as embodied knowledge and skills. The underlying assumption of this model is that, as economic development depends on advances in technological and scientific knowledge, development presumably depends on the accumulation of human capital.
The assumption of a relationship between human capital and economic growth is based on observations that indicate that growth in investment in schooling grow much more rapidly than gross investment in physical capital, and that growth in years of schooling explains approximately 25 percent in growth in per capita income in Korea. The theoretical justification for the assumed relationship between earnings and educational attainment is based on the ...