Households' school costs hit 6-year low in 2012: data
Published : 2013-02-24 11:45
Updated : 2013-02-24 11:45
South Korean households' spending on education declined to a six-year low last year due to an economic downturn and increased government subsidies, data showed Sunday.
The ratio of education expenditures to consumption spending in a household with two or more family members reached 12 percent, the lowest level since 2006 when it was 11.5 percent, according to the data by Statistics Korea.
Households' education expenditure-to-consumption spending ratio rose at double-digit rates in 1997, posting 10.3 percent. It had been on the increase until 2009 when it logged 13.7 percent.
However, the ratio has moved downward since then, with it logging 13.4 percent in 2010 and 12 percent in 2012.
Market watchers said the drop in the ratio of households' education expenditures to consumption spending resulted mainly from households' growing interest burden and government policies to subsidize education.
Another factor was the decreased college entrance rate in South Korea, they said. The college entrance rate fell to 71.4 percent in 2012 from 75.4 percent in 2010.
The fall in the college entrance rate drove shares of education companies including Mega Study Co., the largest firm for college entrance exam courses, to plunge. The market cap of Mega Study fell to 504.7 billion won ($465.6 million) as of Feb. 22 compared with
1.52 trillion won in 2009.
The ratio of education expenditures to consumption spending in households in the lowest 20 percent income bracket was 6.5 percent, while the figure for the highest 20 percent income bracket was 46 percent. (Yonhap News)