Structural Changes and Interregional Income Inequality in the Philippines, 1975-2009

Takahiro Akita and Mark Pagulayan
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Mark Pagulayan: The National Economic and Development Authority (NEDA), Philippines

No EMS_2013_14, Working Papers from Research Institute, International University of Japan

Abstract: The Philippines has undergone gradual but substantial changes in industrial structure over the past few decades, and these have been associated with the change in the geographical distribution of economic activity. This study analyzes changes in the determinants of regional income inequality in the Philippines associated with these structural changes from 1975 to 2009. This is accomplished by using the bi-dimensional decomposition method. The reduction of the disparity between the National Capital Region (NCR) and the rest of Luzon is essential to decreasing Luzon's high within-region inequality and overall interregional inequality. But this is not easy to accomplish, since services sectors have enjoyed agglomeration economies that NCR has nurtured under economic liberalization and globalization. Decentralization has been one way to ameliorate the disparity, but its effects are ambiguous. Another option would be to relocate some manufacturing activities to areas outside NCR where they could enjoy localization economies.

Keywords: structural change; regional income inequality; the Philippines; bi-dimensional decomposition; weighted coefficient of variation (search for similar items in EconPapers)
JEL-codes: O18 R11 R12 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2013-09
New Economics Papers: this item is included in nep-ltv, nep-pbe and nep-ure
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https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2013_14.pdf First version, 2013 (application/pdf)

Related works:
Journal Article: STRUCTURAL CHANGES AND INTERREGIONAL INCOME INEQUALITY IN THE PHILIPPINES, 1975–2009 (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:iuj:wpaper:ems_2013_14

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