Housewife Ahn Jee Eun began looking for a job to supplement her husband’s income after the cost of sending their twin 3-year-old daughters to preschool pushed the family’s bank account into the red. “My husband and I are spending about half of our income on education,” says Ahn, who pays more than 1.7 million won ($1,500) a month on tuition. Ahn says she’d rather spend less on groceries than pull her girls out of their exclusive kindergarten, where the other kids are from wealthy families and the mothers know which schools and tutors are the best.
In the latest quarter, private consumption in South Korea fell the most since the 2009 global recession. Heavy spending on schools and tutors had an impact. “The cost of education is the biggest contributor to the decline in household spending after household debt,” says Lee Ji Sun, an economist at the LG Economic Research Institute. “Worse, some are taking out new loans to pay for schooling.”