Private Tutoring and Educational Inequality: Evidence from a Dynamic Model of Academic Achievement in Korea

This paper studies the effect of private tutoring on academic achievement and educational inequality in Korea. Korea has the largest system of private tutoring in the world along with outstanding performance on international academic tests, such as the PISA. Korea's school system is characterized by limited school choice and low variation in quality and curricula across schools, which provides incentive to use private tutoring for additional educational investment. Out of concerns that wealthier families can choose more and better tutoring, the government enacted various forms of regulation on the tutoring market. This paper seeks to estimate the effect of private tutoring on academic achievement and to evaluate the impacts of a range of government policies. It develops and estimates a dynamic discrete choice model of private tutoring and self-study decisions using panel data from the 2005 to 2011 waves of the Korea Education Longitudinal Study. The data follow 7th graders annually until one year after high school graduation and contain detailed information on private tutoring use and test scores.