Life-changing college exam puts South Korea on hold
South Korea came to a grinding halt on Thursday as 650,700 high school seniors prepared to take the most important exam of their lives: the college entry exam.
Securing a high grade on your College Scholastic Ability Test (CSAT) practically guarantees access to one of Korea's top three universities, and a job with the civil service or one of South Korea's chaebols - business conglomerates - Samsung, Hyundai and Daewoo.
Trading on South Korea's stock market was halted for an hour, opening at 10am, instead of 9am, while planes were prevented from taking off or landing for 40 minutes and the military stopped conducting drills, to reduce noise as students took their exams at over 1,250 test centers, according to media reports.
(Read More: South Korea ramps up forex reserves to record high)
Meanwhile anxious parents have been piling into local temples to pray for their child's success for the past week.
Jaden Lim, a Korea University graduate, told CNBC that performing well on your college entry exam served as a "ticket for life."
"It's a life changing thing… Parents spend a lot of money on good education in high school and on extra tuition to get their child into one of the top three universities," he said.
"If you don't get into one of these top three, it makes life much harder. It's much, much harder to get a good job," he said.
The top three universities in South Korea are known as the SKY universities, an acronym devised from the first three letters of their names, referring to Seoul National University, Korea University and Yonsei University. Seoul National is considered the most prestigious.
(Read More: South Koreans speed ahead in sluggish Europe)
Lim said he remembers the preparation for the exams being a highly stressful time.
"It's very, very stressful. You prepare for three years prior to the exam. Studying is the most important thing in your life and you are awake till early hours of morning," he added.
And according to Wai Ho Leong, senior regional economist at Barclays, the intense pressure for students to do well on these exams is the highest it has ever been, especially as the trend of South Koreans having fewer children continues, meaning the pressure on their offspring to perform is all the more intense.
Korea's fertility rate – the average number of births a woman has in her lifetime – stands at just 1.24, among the lowest in the world
(Read More: Aging to challenge South Korea's economic transformation)
"In recent years the emphasis [on the exams] has deepened. The dwindling demographics mean it's more costly to have children. The burden aspect [on children to achieve the top jobs] is more concentrated," he said.
"This exam matters more than how you perform at university…If you don't do well on this exam, the range of employers [willing to employ you] narrows, you won't get accepted into this top pyramid. You might end up working at a small to medium enterprise (SME) or in the provinces," said Leong.
However, Leong added that while the exams do have a paralyzing effect on South Korea, in a similar fashion to Australia's Melbourne Cup, the ritual is so deeply entrenched in South Korean way of life it was unlikely to have much impact on the economy.
(Read More: South Korea to decide on $7.7 billion jet tender)
"No, it does not have an effect on the economy. It paralyzes the nation but trading only stops for an hour, traffic soon returns to normal, there is no severe disruption. Although, we don't tend to arrange client meetings at this time," he added.
Tony Michell, managing director of Korea Associates Business Consultancy, said any office hours lost during the college entry exam period was unlikely to have an economic impact as so much work is done by mobile and smart phone.
He added that getting into the top three universities in South Korea was more to do with social standing rather than the quality of the education.
"Yes Yonsei, Korea, SNU are traditionally the best universities... [But] honestly today there are 20 or more universities of equal standing academically. The kudos of the SKY universities is tapping into the alumni rather than the quality of education," he added.
South Korea's university tuition fees are the third most expensive out of all the Organization of Economic and Co-operation and Development countries, according to South Korea's Ministry of Education, Yonhap News Agency reported this week.
Yonhap also reported in May that the nation's competitive education system had led to suicide being the largest cause of death among young people aged 15-24 years in South Korea, according to Statistics Korea, for the third consecutive year in 2010.
— By CNBC's Katie Holliday: Follow her on Twitter @hollidaykatie