Since 2004 more than 80% of all high school graduates in Korea went on to university or at
least junior college although higher educated people suffer more seriously from unemployment.
In human capital theory reducing the unemployment rate when increasing the level of education
was determined to be a stylized fact. But the current situation in Korea does not justify the
theory. Using the Korean Labor and Income Panel Study and the German Socio-Economic Panel three
empirical essays aim to find the corresponding reasons and solutions. Koreans' strong interest
in university studies could be caused by lack of promising alternatives. An enhancement of the
job training system along German lines seems to offer a reasonable solution to the oversupply
of university graduates in Korea.
