Demographic Dividend and Human Capital: The Case of the Philippines
Date of Award
12-1-2023
Document Type
Thesis
Degree Name
Master of Arts major in Economics Option I:Thesis
First Advisor
Leonardo A. Lanzona Jr., PhD
Abstract
Lower fertility rates and constantly declining mortality rates reflect a demographic transition which gives the country the opportunity to capture the demographic dividend – measured in terms of higher savings and capital accumulation. In the Philippines, the fertility rate has been steadily declining, and yet remains the highest amongst the lower income countries in Southeast Asia. While the country was still able to generate higher income per capita after its first demographic transition, households are often faced with difficulties in generating savings. The issues of whether demographic dividends are valid or whether these are simply a result of age composition and education thus exist. While numerous literatures on demographic transition is done through a macroeconomic lens, the paper aims to subject the theory through a series of tests using microeconomic panel data by means of a two-stage least square (2SLS) fixed effects model. The results show that the theory of demographic dividends is quite robust, indicating that savings have an inverse relationship with household size. However, it is observed that household idiosyncratic fixed effects that persist over time plays a significant part in supporting the theory even after it was seen that the demographic transition is not too significant in affecting savings, controlling for household size endogeneity. This suggests that most households are caught in a household-specific poverty trap that prevents them from increasing their savings, despite improvements in the economy. Unless household-specific programs address household-specific needs, the country may not benefit from the demographic transition.
Recommended Citation
Guevarra, Ma. Dianne E., (2023). Demographic Dividend and Human Capital: The Case of the Philippines. Archīum.ATENEO.
https://archium.ateneo.edu/theses-dissertations/1032
