July 11, 2011 13:23
Private universities in Korea are preparing for declining revenues due to a persistently low birthrate, mirroring the situation in Japan, which has seen a string of bankruptcies among private colleges due to the same problem.
According to Statistics Korea on Sunday, the number of 18-year-olds in Korea inched up from 624,000 in 2005 to 701,400 in 2010 but will start dropping this year. Shin Hea-yong, a mathematics professor at Chungang University, said, "The number of high school graduates has risen over the past few years, but will start declining for the next 10 years, and universities are scurrying to recruit new students."
By 2018, some universities could face closure due to a dearth of students, because the number of high school graduates will decline by around 52,000 from the 580,000 students currently enrolled in universities and two-year colleges. With the university entrance rate at 80 percent among high school graduates, that boils down to around 420,000 students. If these students fill up the 350,000 slots at four-year universities, there are only 70,000 left for two-year colleges, which have up to 220,000 places to fill.
If the trend continues, 90 colleges are forecast to close down by 2030, according to the Korean Educational Development Institute.
Korea's birthrate plunged below the level needed to maintain population numbers in 1983, reaching 2.06 as against the needed 2.1. By last year it had reached 1.2. The number of newborns plummeted from 840,000 in 1982 to 460,000 last year.
Manufacturers of diapers and baby formula already suffer dropping revenues. And businesses catering to young people such as pool halls, skating rinks, ski resorts and taekwondo gyms will be hit next. Ice skating rinks have multiplied from 26 in 2002 to 43 now, while athletic facilities such as taekwondo gyms, have mushroomed from 9,700 to 13,000. The number of pool halls has grown from 19,300 to 24,000.
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