Econometric Analysis of the Impact of Education on Income Inequality in the Philippines

Date

6-2023

Degree

Bachelor of Science in Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Luisito C. Abueg

Committee Member

Gideon P. Carnaje, Agham C. Cuevas

Abstract

Education is a key priority for the Philippine government, but challenges in accessibility, teacher quality, dropout rates, and education quality persist. This study examines the relationship between education and income inequality in the Philippines using annual time series data from 1980 to 2018. Contrary to some previous research, the findings suggest that an increase in education level may widen wage gaps, indicating a positive relationship between education and income inequality. However, an alternate model incorporating the index of human capital per person reveals a negative impact on income inequality, supporting the human capital theory. The study also highlights the delayed effect of education expenditure on income inequality, as well as the negative correlation between GDP growth and income inequality.

The results indicate the need for improved education accessibility, inclusivity, and quality, as well as addressing discrimination in schools to reduce income inequality. The study recommends revisiting education policies such as the Pantawid Pamilyang Pilipino Program, enhancing education provisions, and implementing effective measures to ensure equity in the education system. Additionally, comprehensive approaches beyond education, considering other socioeconomic factors, are necessary to tackle income inequality. The study underscores the need for education system reforms, addressing issues like inadequate funding, standardized testing, lack of creativity, and corruption. By prioritizing quality and accessible education for all Filipinos, irrespective of their socioeconomic status, income inequality can be addressed more effectively. Ultimately, significant changes in the economic structure are crucial in tackling the persistent challenge of income inequality in the Philippines.

Language

English

LC Subject

Income distribution, Econometrics

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2023 E2 L39

Notes

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Document Type

Thesis

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