Seoul university admission no longer guarantees surpassing parents' wealth: OECD

Pursuing higher education in Seoul, often referred to as 'In-Seoul,' no longer guarantees that young South Koreans will achieve a better economic standing than their parents, according to a recent analysis by the Organisation for Economic Co-operation and Development (OECD).

“

Moving to the Seoul metropolitan area increases absolute income but does not enhance intergenerational income mobility.

The report, based on data from the Bank of Korea and the Korea Labor Panel Survey, tracked over 1,000 individuals born between 1971 and 1990 and their parents from 1998 to 2023. It found that while relocating to the Seoul metropolitan area does lead to higher absolute incomes, it does not significantly improve intergenerational income mobility. In essence, young people may earn more than they would in their hometowns, but their likelihood of moving up the economic ladder relative to their parents has decreased.

The OECD highlighted that the competition for top universities and a shortage of high-quality jobs are primary drivers for youth migration to the capital region. However, the study suggests that the path to prosperity in Seoul is not as clear-cut as it once was. This trend is particularly pronounced among younger cohorts (born 1981-1990), where the intergenerational mobility effect of moving to Seoul is weaker. The report also noted that the ability of young people from lower-income families to afford relocation is a significant barrier, further linking upward mobility to parental economic status.

“

Competition for top-tier universities and a lack of quality jobs are the main reasons young people continue to move from regions to the Seoul metropolitan area.

Rising housing costs in Seoul exacerbate these challenges, making it increasingly difficult for young people to establish themselves. The proportion of homes in Seoul affordable to middle-income households has plummeted from 32% in 2012 to just 7% last year. To address this, the OECD recommends a dual approach: implementing policies to reduce the financial burden of relocation for young people and increasing investments to revitalize regional economies. Additionally, the organization suggested that university admission quotas should be more flexibly adjusted based on demand, and that non-Seoul based universities should enhance their competitiveness by linking with regional industries.

“

New research suggests that moving to the Seoul metropolitan area is not a path to prosperity as it once was.