Exams, districts, and intergenerational mobility: Evidence from South Korea

This paper examines how student assignment rules impact intergenerational mobility. High school admission had traditionally been exam based in South Korea. However, between 1974 and 1980 the central government shifted several cities to a school district based admission system. I estimate the impact of this reform on the intergenerational income elasticity. Results indicate that the reform increased the intergenerational income elasticity from 0.15 to 0.31. Furthermore, I find that district assignment increases the impact of parental income on migration to reform cities. The probability of migration associated with a 10% increase in parental income increased by 1.7 percentage points after the reform. In sum, I find that the shift from a merit to a location based student assignment rule decreases intergenerational mobility and promotes selective migration by higher income households.