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Returns to education in the Philippines

Author

Listed:
  • Hope A. Gerochi

    (University of the Philippines School of Economics)

Abstract

The paper estimated the marginal private and social rates of return for education investments over time (1988, 1990, and 1995) using the “elaborate method” and Mincer equation. Rates of return estimates in general were relatively stable, mostly increasing between 1988 and 1990, but fell in 1995. The unlikely trend of high or stable returns when educational attainment was increasing suggests that demand for educated workers somewhat kept pace with supply, due perhaps to technological expansion which favors skilled workers. Private and social rates of return consistently exceeded benchmarks used to judge the profitability of investment except for dropouts, possibly indicating the “sheepskin” effects and validating the private incentive for completion. As non-completion can be involuntary, government intervention is necessary—it should provide financial support to poor families to keep their children in school or implement policies to reduce unnecessary attrition in schooling attendance.

Suggested Citation

  • Hope A. Gerochi, 2002. "Returns to education in the Philippines," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 39(2), pages 37-72, December.
    • Handle: RePEc:phs:prejrn:v:39:y:2002:i:2:p:37-72
    as

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    Citations

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    Cited by:

    1. Yee, Karol Mark Ramirez, 2023. "Raising the floor while lowering the ceiling: Reduced inequities in education returns in the Philippines," International Journal of Educational Development, Elsevier, vol. 101(C).
    2. World Bank Group, 2017. "Developing Socioemotional Skills for the Philippines’ Labor Market," World Bank Other Operational Studies 28320, The World Bank.
    3. Olfindo, Rosechin, 2018. "Diploma as signal? Estimating sheepskin effects in the Philippines," International Journal of Educational Development, Elsevier, vol. 60(C), pages 113-119.

    More about this item

    Keywords

    Philippines; human capital; education investments; rate of return;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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