Education, Care, and Fertility in South Korea: Essays on Household Constraints and Social Pressure

Abstract

This dissertation studies how family decisions about education, care, and fertility are shaped by social pressure and household constraints. Across the three chapters, I focus especially on South Korea, where very low fertility has coincided with intense educational competition, high private education spending, and persistent gendered expectations around childcare. The dissertation combines empirical evidence and theoretical modeling to examine how peer behavior, parental time allocation, and education-related status competition can raise the perceived cost of children and contribute to lower fertility. The first chapter, ``Can Parents Overspend in their Children's Education? Peer Effects in Korea's Shadow Education Market,'' studies peer effects in household tutoring expenditures using the Korean Education Longitudinal Study. I focus on the transition from middle school to high school, when students in many equalization areas were assigned to general academic high schools by district lottery and re-sorted into new schools and peer groups. The results show that peer exposure affects household tutoring spending, with the clearest increases occurring when students enter the top quartile of the peer-spending distribution. More moderate upward moves produce weaker and less stable effects, while downward transitions are associated with sharper reductions in spending. These findings suggest that high-spending peer environments can intensify positional pressure and shape household education investment in Korea's shadow education market. The second chapter, “How Many Parents Does It Take? Parental Time Allocation and the Effectiveness of Fertility Subsidies,” develops an overlapping-generations model of parental childcare time, fertility, and human capital investment. The chapter asks whether greater paternal involvement necessarily reduces mothers’ childcare burden. When maternal and paternal time are substitutes, father involvement can relax the maternal time constraint. When they are complements, however, greater father involvement can raise mothers’ childcare time as well, lowering fertility and shifting resources toward child quality. The chapter also shows that fertility subsidies may have limited or unintended effects when they do not change the underlying organization of care. The third chapter, “Rat Race, Educational Signaling, and Fertility,” develops a model linking peer pressure in education spending to fertility and long-run demographic outcomes. Households choose consumption, fertility, and shadow education investment, but perceived child quality depends partly on spending relative to peers. This creates overinvestment in education and lowers fertility. The chapter then embeds this mechanism in a dynamic framework in which population and human capital evolve jointly. Calibrating the model to Korea suggests that shadow-education competition creates a modest but meaningful fertility distortion and contributes to excessive education spending.