Effects of Government’s Regulations on Private Education Expenditures in Korea

The private education market has been expanding in Korea. Hence, various measures at the government level are implemented, such as regulating private educational institutes and strengthening school curricula at all levels. This paper analyzes whether direct regulation on the business hours of private educational institutes is effective in reducing the country’s overall private education expenditure. Using the youth panel data of the Korea Employment Information Service from 2007 to 2010, the paper focuses on the regulation of private educational institutes and analyzes the regulation effect on private education expenditures of Korean high school students using Tobit model. Furthermore, the stochastic dominance test is conducted by taking the nonparametric approach of Linton et al. (2010). Regulation effects in both approaches vary among the regulated regions.