Avoiding the Middle-Income Trap Through Investments in Universal Secondary Education

Investing secondary education to equip the workforce with problem-solving, innovative, collaborative, and critical thinking abilities is necessary to adapt to the industrial structure's rapid transformation. Photo credit: Asian Development Bank.

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The secondary education sector can benefit from government support for private schools and vocational schools.


Investments in the education system significantly influence the economic and social progress of a nation. The current enrollment rate for primary education, which represents universal education, stands at 90% in most countries across the globe. However, enrollment in secondary education remained at 77% (gross) in 2022.[1] Moreover, enrollment rates in rural areas and for females are significantly lower than those of urban areas.

Figure 1: Upper Secondary Education Enrollment

Source: S. Cohen et al. 2022. Potential Economic Impact of COVID-19-Related School Closures. Economics Working Paper Series. May (using UN Statistics Division, UN Data). Manila: Asian Development Bank (accessed 15 January 2022).

Universal secondary education is crucial for balanced regional development and social equity. Countries need to pay attention to secondary education to equip its workforce with the problem-solving, innovative, collaborative, and critical thinking abilities necessary to adapt to the industrial structure's rapid transformation.

Scott Roselle (2020) notes the urban–rural economic divide in the People’s Republic of China (PRC) is rooted in the mismatch of skills and low upper secondary education enrollment in rural PRC. According to his book Invisible [People's Republic of] China: How the Urban–Rural Divide Threatens [the People's Republic of] China's Rise, such gap hinders the PRC and other middle-income countries from achieving high-income status. He noted that while not all children need to attend college, they have to complete high school, a pivotal phase of development during which they will acquire the skills required of them in the future.

The Republic of Korea (ROK) is one of the few low-income economies that have moved up to being a high-income economy over the last 70 years. The policy emphasis on universal secondary education has been a key factor in avoiding a mismatch of skills in the transition to heavy and chemical industries from labor-intensive industries during a period of rapid economic development.

This article analyzes the impact of secondary education investment on national economic growth and the significance of achieving universal education, using the ROK as a case study. It examines the strategies the country implemented to improve its educational system despite having limited resources in the 1980s.

Expansion in the Education Sector: Sequential Approach

The Republic of Korea expeditiously achieved universal elementary school education in 1959. Until 1970, the government prioritized enhancing the quality of primary education and allocated majority of the budget for this purpose. The success of the universal primary education program significantly helped the country transition from an agriculture-focused economy to a labor-intensive light industry. 

Following significant improvements in its elementary school education program, the ROK then focused on enhancing secondary education. During the 1970s (at GDP per capita less than $2,000), when the ROK was undergoing industrial restructuring that centered on the heavy chemical sector, administrative and financial assistance for universal secondary education began to grow. To broaden educational opportunities, the government increased funding for secondary schools and implemented comprehensive policies.

Since the 1970s, the percentage of the education budget designated for secondary institutions has demonstrated a steady and progressive increase, reaching its highest point of 40% in 1992 (Figure 2).[2] In 1987, enrollment rate at the secondary level surpassed 90% (at gross domestic product [GDP] per capita below $3,554). Secondary education consistently and substantially helped improve GDP since the 1980s, until the country shifted toward a knowledge-based economy in 1990s.

Figure 2: Percentage of Education Expenditure in the ROK (1965–2016)

Sources: J. Lee. 2010. Sixty Years of Korean Education. Seoul: Seoul National University Press; World Bank Data. Expenditure on Tertiary Education.

Figure 3: School Enrollment Ratio (% Gross) in the Republic of Korea

Source: World Bank Data (accessed 10 November 2023).

Private Sector Involvement and Other Policies

The success of ROK’s secondary education program could also be attributed to the active involvement of the private sector. In 2021, 20% of middle school, 50% of high school, and 80% of university students were enrolled in private schools and universities. The government provided financial assistance to private schools for operating costs and teacher salaries. This enabled students to attend classes in private institutions for the same tuition fees as in public schools and receive an education of comparable quality.

A special law was also enacted to ameliorate educational circumstances in rural regions and offer financial assistance to low-income families residing in those areas. Many secondary schools with industry affiliations were established so students could continue their education while working. Further, the government implemented an alternative education system, where pupils engaged in independent study via broadcasts while attending regular high school classes on weekends. From an administrative standpoint, both the junior high school entrance examination and the high school entrance examination were eliminated.

Vocational high schools, which account for 50% of all high school students, significantly contributed to the industry transition to heavy and chemical industrial sectors from labor-intensive industries. The government prioritized the expansion of vocational high schools as the prevailing college enrollment rate was below 8% until 1970. In 1971, the funding allocated to vocational high schools was almost equivalent to that of higher education. 


A paper by the Organization for Economic Co-operation and Development (2014), found that ROK’s educational system has been more equitable compared to other advanced countries. It noted that the expansion of education contributed to the promotion of equity in the country. The overall equalization of educational access and quality in secondary schools was a result of the ROK government's efforts to improve learning conditions nationwide.

The implementation of universal secondary education has substantially enhanced the human resource capacity in rural regions, thereby bolstering agricultural productivity. However, urbanization has accelerated since the 1970s, leading to a reduction in youth population in rural areas. This highlights the importance of coupling rural development with investments in human capital and employment-generating government policies, such as the establishment of job ecosystems and industrial complexes in rural areas. By doing so, improvements in the educational system can become intricately linked with the progress of the region.

[1] World Bank data. 2018 (accessed 2 November 2023).

[2] J. Lee. 2010. Sixty Years of Korean Education. Seoul: Seoul National University Press.


J. Lee, J. Hyeok, and C. H. Song. 2018. Human Capital and Development: Lessons and Insights from [the Republic of] Korea’s Transformation. United Kingdom: Edward Elgar Publishing.

Organisation for Economic Co-operation and Development. 2014. PISA 2012 Results: What Students Know and Can Do—Student Performance in Mathematics, Reading and Science. Vol. I, Revised edition, February 2014. Paris: PISA, OECD Publishing.

Meekyung Shin
Education Specialist, Human and Social Development Sector Office, Sectors Group, Asian Development Bank

Meekyung Shin specializes secondary education policies, Higher Education Innovation, and equity. She has participated in research and provided consulting services on innovative projects in the field of higher education. She is currently working on support projects to strengthen the educational capacity of medical and nursing schools in developing countries.

Qingfeng Zhang
Senior Director, Agriculture, Food, Nature, and Rural Development Sector Office, Sectors Group, Asian Development Bank

Qingfeng Zhang is leading and overseeing ADB’s overall rural development, natural resources, food security, and agriculture operations by providing relevant and practical technical advice. He administers loan and technical assistance projects in green agricultural value chain, efficient use of natural resources, climate resilient agriculture, rural renewable biomass energy, healthy agriculture-ecosystems, food safety, and Internet Plus agriculture.

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