Document Type

Article

Publication Date

7-1-2023

Abstract

Defining inclusive growth as growth that has benefited the households who have the lowest human capital levels, this study examines the inclusiveness of economic growth in the Philippines in the past two decades. Combining information from the Labor Force Survey and Family Income and Expenditures Survey for various years, including a panel of 6,500 households from 2003 to 2009, this study classifies households into ordered groups based on human capital level, then compares the performance of the various groups in terms of various employment, income, and expenditure outcomes over time. It finds the evidence to be mixed, although the weight of evidence, especially using panel data, points to those who have lower human capital levels benefiting disproportionately less from economic growth, and thus to non-inclusiveness of Philippine economic growth for most of the period studied; although there appears to have been a notable departure from this pattern from 2012 to 2015. This paper attributes this finding to the slow improvement in the human capital levels of the lowest human capital level households and the pattern of economic growth: driven by high-end services and spurred by overseas employment, which has so far benefited mainly households with already high human capital levels.

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