On the basis of longitudinal information on education changers received fromthe Korea Labor and Income Panel Survey, the current study finds that theprivate rate of return to education is overstated in cross-sectional data by notcontrolling for individuals’ ability effects, and ability-free returns are higher formen than for women. Unlike existing studies, it is found that the marginalreturn increases with education investment, which, combined with the fact thathigh income earners tend to invest more in education, suggests that educationplays an inequality-enhancing role in Korea.