Investigating the Unintended Consequences of the High School Equalization Policy on the Housing Market

Gyeongcheol Cho, Younyoung Choi and Ji-Hyun Kim
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Gyeongcheol Cho: Department of Psychology, McGill University, 2001 McGill College Avenue, Montreal, QC H3A 1G1, Canada
Younyoung Choi: Department of Adolescent Counseling, Hanyang Cyber University, Seoul 100255, Korea
Ji-Hyun Kim: Department of Real Estate, Hanyang Cyber University, Seoul 100255, Korea

Sustainability, 2020, vol. 12, issue 20, 1-9

Abstract: Owing to its potentially far-reaching impact on a large population, an educational policy may lead to unintended consequences beyond the educational area. The High School Equalization Policy (HSEP), introduced into South Korea in the mid-1970s, is representative of such a policy. HSEP prohibits high school entrance exams and randomly assigns students to a high school near their residence. Despite its aim of ensuring equal opportunities in education for all students regardless of socio-economic status, a frequent criticism was that HSEP could prompt students’ families to move to a region near traditional elite high schools, which, in turn, would widen the gap in house prices between different regions. Thus, we conducted an empirical study to examine the secondary influence of the HSEP on the housing market via a difference-in-differences (DD) analysis. We used house price data from the Gangwon province, as the partial introduction of HSEP into the province allowed for a quasi-experimental study on the effect of HSEP. The result revealed that, contrary to expectations, the HSEP in Gangwon had the opposite spillover effect of reducing the gap of the average house prices by 5%~9% across regions.

Keywords: educational policy evaluation; unintended consequence; high school equalization policy; housing market; difference-in-differences analysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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