Employment and Poverty in the Philippines
This study analyzes labor market performance in the Philippines from the perspective of workers’ welfare. It argues that pervasive in-work poverty is the main challenge facing labor policy. Poverty is primarily due to low earning capacity of the po...
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| Language: | English en_US |
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/979071488446669580/Employment-and-poverty-in-the-Philippines http://hdl.handle.net/10986/26320 |
| Summary: | This study analyzes labor market
performance in the Philippines from the perspective of
workers’ welfare. It argues that pervasive in-work poverty
is the main challenge facing labor policy. Poverty is
primarily due to low earning capacity of the poor and to
their limited access to regular and productive jobs. Behind
these are the two interrelated root causes of in-work
poverty—low education of the poor, and the scarcity of
productive job opportunities. The labor market is segmented
into “good” and “bad” jobs, with the poor working in the
latter. They hold jobs that are informal, temporary or
casual, and low-paid. Widespread informality means that the
poor neither benefit from the minimum wage policy nor from
employment protection legislation. They do not benefit from
wage growth either, because their bargaining power is weak.
“Good” jobs are so few, especially in rural areas, that even
better educated workers are often forced to take unskilled
jobs and work as low-paid laborers. The reduction of in-work
poverty hinges on removing constraints to gainful employment
in both supply side (better education and skills) and demand
side (better jobs). It is critical that the young poor have
improved access to quality education, and be equipped with
skills required in the modern sector of the economy. But in
parallel, better jobs need to be created, which can be
attained from the growth of the formal and higher value
added sector of the economy. The process of structural
transformation should be supported by effective labor
policy. Labor regulations need to be made simpler and more
flexible to facilitate the reallocation of labor from less
to more productive activities, and from informal to formal
sector. Targeted training programs have the potential to
address the problem of low skills among the poor workers,
especially the young ones. Such programs should be developed
on a pilot basis and expanded if proven to be cost-effective. |
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