1. Higher Education Reform in Korea - Policy Responses to a Changing Labor Market - Higher Education Reform in Korea - Policy Responses to a Changing Labor Market - February 13, 2007 Moon Hee Kim Ministry of Education & Human Resources Development Republic of Korea Moon Hee Kim Ministry of Education & Human Resources Development Republic of Korea

2. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 1 CONTENTS 1 Overview 2 The Change of Labor Market 3 HE Policy Responses to Labor Market Change

3. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 2 1. Overview

4. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 3 1,642,119791,9282,434,04717843221Subtotal 1,483,180 93,061 130 1,027 64,658 63 405,256 25,881 87,374 273,417 1,888,436 25,881 180,435 130 273,417 1,027 64,658 63 150 8 1 3 15 1 25 11 6 1 175 11 14 1 3 15 1 University Teacher college Industrial Univ. Tech university Air&correspon Miscellaneous Cyber College in Company 788,14533,553821,69814213155Subtotal 886,926 65 39 3,600 33,553817,994 65 39 3,600 139 - 1 2 13152 - 1 2 Junior College Technical college Miscellaneous Cyber College PrivatepublicTotalprivatepublictotal Number of studentsNumber of schools Number of Students & Schools, HE

5. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 4 Economic Development 19701980199019971998200020042005 Population (Millions) 32384346 4748 GNI per capita (US$) 6502,3247,751 10,363 6,8439,675 14,19316,291 Unemployment rate (%) 4.45.22.42.66.84.13.7 Labor force (Millions) 10141921 222324 Labor force Participation rate (%) 47.659.060.062.260.560.762.162.0

6. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 5 Sequential Expansion of Education Step-by-step attainment of universal education: primary  secondary  higher education EliteMass Universal ※ Trow, “Forms and Phases of Higher Education”: Elite  Mass  Universal

7. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 6 Economy Period Education Take-off & export-driven growth(’60s); export acceleration(early ’70s) 1960s ~ mid-1970s Expansion of primary and middle school education; emphasis on TVET(late ’60s) Structural adjustment(late ’70s); from imitation to innovation(’80s) mid-1970s ~ 1980s Expansion of high school and higher education; strengthening of TVET Pursuit of national competitiveness(early’90s); knowledge-based economy(late ’90s) 1990s~ Present K-12 quality enhancement; investment in higher education; reform for lifelong learning Policy Foci for Economy and Education

8. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 7 2. The Change of Labor Market

9. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 8 Changes in Industrial Structure ※ 2015p: Agriculture 5.5%, Manufacturing + Construction 18.3%, Service 76.2%

10. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 9 Demographic change Low Fertility Ageing Total fertility rate No. of birth Demographic structure: age group

11. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 10 Unemployment rate(%) Youth Unemployment Youth(15~29 세 ) Unemployment(’06.11), 7.5%(34.3mil.): 2.3times greater than the overall UR

12. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 11 Skill Mismatch / Low Satisfaction A BB CC Lack of qualified core talents Lack of qualified core talents Youth unemployment (343,000) Youth unemployment (343,000) Labor shortage at SMEs (197,000) Supply Demand Low level of satisfaction towards university graduates ※ Ranked 50th out of 61 countries in terms of university education meeting economic demands(IMD, 2006) economic demands(IMD, 2006) Skill Mismatch in labor force

13. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 12 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1992199419961998200020022003 1.5 1.6 1.7 1.8 1.9 2.0 2.1 (company size) Over 500 / 10-29 4-year college graduate / HS graduate Regular / non-regular employment Wage gaps by employment (ratio) Wage gaps / Wage premium Increasing non-regular employment  widening a wage gap. University premium decreased until mid-90s but…

14. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 13 3. HE Policy Responses to Labor Market Change

15. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 14 Top-notchprofessionals (Graduate Schools)Regionalinnovationinitiators (Universities) Industrialengineers (Junior Colleges ) LB information Restructuring & competition Restructuring & competition Partnerships Selected funding for specialization Selected funding for specialization Vision and Goals

16. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 15 Major strategies Improvement of HE/labor market information - manpower forecasting and assessment of skill requirements Promotion of restructuring and competition through market discipline - use of various incentives and disincentives Funding based on “ selection and concentration ” - targeted funding for specialization and regional parity Financing learners rather than providers - learner-oriented/demand-side financing (student loans) Enhancement of networking and partnerships - with local governments and business community

17. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 16 Strengthening graduate programs in high value-added service areas: medicine, law, international finance, MBA, etc Introduction of a new HE quality assurance system - Establishing the new quality assurance agency including the accreditation and certification process with global standard - Financial provisions aligned with institutional evaluations Clearing HE information - Inputs measures: PT ratio, unit expenditure, occupancy/ enrollment rate - Process/Outcome measures: persistence/graduation rate, employment rate, customer satisfaction, etc. Financial incentives for reform and restructuring HE Inst. - Subsidies linked to amalgamation among institutions ※ Reducing enrollment by 50K students by 2009(18 inst. merged into 9, as of 2006) HE Reform Initiatives

18. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 17 Major Programs to enhance the Quality ◈ ◈ 1st-Phase Brain Korea 21 (1999~2005, US$ 1.4billion) ▶ Enhanced university research capacity; induced competition ※ Number of BK21 science & tech SCI-level papers: 3,765(1998)  7,947(2005) ※ Number of BK21 science & tech SCI-level papers: 3,765(1998)  7,947(2005) ▶ Produced scientists of international competence ※ Number of doctors in science & tech(1999~2005): 6,602 ※ Number of doctors in science & tech(1999~2005): 6,602 ◈ ◈ 2nd-Phase Brain Korea 21 (2006~2012, US $2.3billion) ▶ Cultivate 20,000 graduate-level best brains per year ※ 74 universities, 244 project units, 325 project teams(2006, US$ 290million) ◈ ◈ New University for Regional Innovation ( 2004~2008, US$ 1.2billion ) ▶ Specialize local universities; nurture human resources readily ※ 109 local universities, 130 project units adaptable to the industry ※ 109 local universities, 130 project units ◈ ◈ “Connect Korea” Project (2006~2010, 150million) ▶ Strengthening partnership b/w universities and industry ▶ Establishing Consortium b/w TLOs (Technology Licensing Offices) in univ. (1US$ = 1,000KRW)

19. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 18 The government system changed since 2001. BeforeNow NameMOEMOE&HRD HeadMinisterDeputy Prime Minister(DPM) Scope Education, Adult Education Education, LLL, Coordinating HRD Policy Government Role Coordinate HRD/VET polices among different line ministries. - Ministerial Committee on HRD (chairperson : DPM) - The Committee is composed of 14 Ministers

20. Labor Market Change and Higher Ed., Expert Meeting, CERI(OECD) 19 Thank you mhk3333kim@moe.go.kr