Why Should Social Investment be Redistributive? : Effect of Parents and Shadow Education on Academic Performance and Labour Market Income

With the advent of the 21st century, social investment has been one of the key social policy paradigm in many OECD countries. Social investment policies are argued to contribute not only to equal opportunity and human capital development but also to the sustainability of welfare states. Yet, many also criticize the role of social investment policies as they tend to focus much on the (re-)commodification of labor force and are unable to cope with increasing inequality. Indeed, education policy within the social investment package largely neglect the equitable social outcome in many countries. In this context, this study aims to discuss what role social investment should play against rapidly weakening social mobility in South Korea. First, this study will analyze how family background and shadow education influence educational attainment and subsequently, how educational attainment affects labor market income. For measuring educational attainment, we will utilizes the university ranking since most of Korean young people go to the university. Using the Korea Education and Employment Panel (KEEP) database, we will conduct path analysis to figure out how strong the effect of family and shadow education is on students’ academic performance and labor market income. Then, this study will discuss the analysis result and the role of social investment policies in Korea. We will argue that family background has strong influence on educational attainment and labor market income and that social investment policies should actively play a re-distributive role in reducing gaps from family backgrounds. Finally, we will discuss policy implications.