The Korean Economic Review
College Majors in Limited Supply: The Case of Private Universities in Korea
Joseph Han (KDI)Year 2022Vol. 38No. 3
AbstractThe distribution of college majors often shows signs of rigidity despite evident changes in the world of work. As a possible explanation for the distribution rigidity in the Republic of Korea, this study focuses on supply-side restrictions, specifically a region-based cap on university enrollment. Using the national-level demand change for each major as an instrument for program-level demand change, this study finds a systematic difference between regulated and unregulated private universities in the responsiveness of program size to student demand. Analyses using sharp changes in regulatory status confirm that the enrollment regulation slows internal adjustments, showing the need for regulatory reform.