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Workers’ Earnings in the Philippines: Comparing Self-Employment with Wage Employment

Rana Hasan and Karl Robert L. Jandoc
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Karl Robert L. Jandoc: Asian Development Bank

Asian Development Review, 2010, vol. 27-1, issue 1, 43-79

Abstract: Analysis of labor force survey (LFS) data since the early 1990s reveals several important changes in the structure of the Philippine labor force. One is the movement from self-employment to wage employment across a wide range of production sectors. To evaluate this change in terms of workers’ earnings, we combine information on household incomes from the Family Income and Expenditure Survey with information on household members’ employment-related activities from the LFS. We also examine broad structural trends for employment, wages, and earnings. The findings indicate high variance in the earnings of the self-employed and their earnings and educational profiles resemble those of casual wage employees. Both are surpassed by those of permanent wage employees even when observable worker characteristics are controlled for. As self-employment gives way to wage employment, especially casual wage employment in the services sector, the key policy challenge is tackling the slow growth of wages and earnings.

Date: 2010
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