Formal - informal sector wage gap : the case of skilled blue - collar workers in the CALABARZON Region

Date

6-2016

Degree

Bachelor of Science in Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Rodger M. Valientes

Committee Member

Jhoana V. Alcalde, Isabelita M. Pabuayon

Abstract

Using secondary data from the Labor Force Survey 2014 (4th Quarter), the study compared the formal and informal sector skilled blue-collar workers in terms of wages and factors that affect these wages in the CALABARZON Region (Region IV-A). The personal characteristics of the two types of workers have been found to be different. Females, non-married individuals, middle-aged workers, and those of lower years of schooling were dominant in the informal sector as consistent with other studies in developing countries. A test on the means led to one of many conclusions that although workers in the informal sector work longer a day, they received lower wage of Php180.57/day as compared to formal sector workers who received Php307.30/day and had longer years of schooling. Factors such as skills, education years, age, sector, sex, and marital status had been found to be significant in affecting the growth of wages. However, when the wage model was separately regressed for each sector, the results suggested that the education years was not significant in explaining the growth of wages in the informal sector. Lastly, using the Oaxaca-Blinder decomposition method, there was a 12.27% wage gap existing between the two sectors of which a larger portion was explained than unexplained. The explained part accounted for the differences in the mean endowments of the productive characteristics of the workers specified in the model. The unexplained part, on the other hand, accounted for the differences in slope coefficients or potential effects of differences in unobserved variables and was usually attributed to labor discrimination.

Language

English

LC Subject

Working class -- Wages

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2016 E2 S86

Notes

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Document Type

Thesis

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