SUMMARY about the topic: Education and Labor Market – Hanol Lee

1. What research done and contributed:

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Firstly, the research is composed of five parts: Introduction, education and labor market, evolution of education over two centuries, recent trends of education inequality and educational mismatch in the Korea labor market. Many observers have emphasized the crucial important of human capital, particularly as attained through education, to economic progress. An abundance of well-educated people goes along with a high level of labor productivity. Recently, education attainment has been expanding and educational inequality has been narrowing in many countries and region, but at the same time income inequality has been widening. Researcher reveals benefits of education which are contribution to higher earnings, improvement of employability, better health and nutrition, improvement of labor productivity, facilitation of technological innovation and its adoption and contribution to economic growth. Many governments use higher spending on education as an effective tool for reducing educational inequality and thus income inequality. However, in researcher’s opinion, education should been obeyed the role, such as: education for higher productivity and earnings, education for better health, nutrition and personal development, education for higher output and national competitiveness, education and long-term economic growth, education, fertility and population growth.
Secondly, with regard to empirical research named evolution of education over two centuries. Researcher and partners construct both educational attainment, disaggregated by education level and gender, for 111 countries from 1870 to 2010 at five year intervals and estimates of aggregate human capital stock measure. They calculate the distribution of education attainment at four broad categories: no formal education, primary, secondary and tertiary. They fill in most of missing observation by forward and backward extrapolation of the survey observations on attainment sand estimate average years of schooling by population group, and by education group. The regions consist of advanced countries, developing regions, Asia/the Pacific, Eastern Europe, Latin American/the Caribbean, Middle East/North Africa and Sub-Saharan Africa. The figures show that the advanced countries and Eastern Europe countries, on average, have grown up considerably more evolution of enrollment ratios than countries from other developing regions though out the period have. The levels of education inequality in Latin American and Sub-Saharan African countries have been higher than those in other regions but have followed increasing trend in recent decades. Education attainment of the total population of advanced countries is expanded and higher than of developing countries.
Thirdly, according to empirical analysis of recent trends of educational inequality, a panel set of cross-country data for 95 economies at five-year interval from 1980 to 2014. The regression result shows a strong negative effect of educational attainment on income inequality. Hence, an increase in the level of educational attainment can contribute significantly to reducing income inequality through the channel of change in educational inequality. Trends of education inequality are, namely: education inequality has declined continuously in all regions during the period and even the regions with greater inequality, such as South Asia and Sub-Saharan Africa, have experienced a substantial reduction in educational inequality.
Fourthly, it is apparent from the information supplied that education and skills mismatches in Korea gets distinct features, such as: employers often face difficulties in finding tertiary graduates with adequate technical skills and competence; college and university graduates often find that their education and skills are underutilized in the workplace. Using data on Korean workers from Program for the International Assessment of Adult Competencies, the present study empirically investigates the incidence and wage effects of educational mismatch. Among full-time workers aged 25-54, approximately 27 percent are over education and 15 percent are under education. The returns to over education for college graduates from health and welfare, engineering and manufacturing, and social sciences, business and law are relatively high compared with those in agriculture, services and humanities and arts. The quality of tertiary education in Korea needs to be improved, to prepare graduates with more diverse competencies and employable skills.
Fifthly, the research presents new data set on long-run enrollment ratios, educational attainment, educational inequality and capital stock measure for numerous countries. Researchers construct a complete data set of historical enrollment ratios, subdivided by education level, gender total population, decomposition of years of schooling…The data is collected clearly over the past two centuries and resource of data is provided trust ways by UNESCO Institute for Statistics, UNDP Human Development Office and Standardized World Income Inequality Database.
2. Limitations and improvements:

Firstly, the research provides evidence that human capital, measured by educational attainment, plays an important role in income distribution. The regression using panel data for a broad range of countries for different period show that more equal distribution of education has contributed significantly to reducing income inequality. An increase in education attainment reduces educational inequality and thus helps to reduce income inequality. The empirical results also show that we can attribute the rising income inequality in many economies in recent decades to a fast income increase, trade expansion, and rapid technological progress. The research mentioned some factors impacting on income distribution. However, the research doesn’t reveal relationship of important factors among education, globalization and technological changes on income distribution.
Secondly, the research doesn’t show policies implication that government should do to decline educational inequality and income inequality. Because the empirical studies measure that reduced educational inequality is an important factor to increase social benefit expenditures and lower inflation contributed to making income distribution equal. Government should get policies as training for unskilled workers or social benefits should be enhanced to protect the weak and ameliorate income distribution.
Thirdly, an important question is how education affects the degree of intergenerational mobility. The research shows that greater income inequality at a given point in time is associated with less intergeneration mobility. One important link between income equality and intergenerational mobility must be the distribution of school among the population. So, next research should concentrate on this important issue.