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

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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 Luzonfs 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.

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File URL: http://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2013_14.pdf
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Bibliographic Info

Paper provided by Research Institute, International University of Japan in its series Working Papers with number EMS_2013_14.

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Length: 26 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:iuj:wpaper:ems_2013_14

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Keywords: structural change; regional income inequality; the Philippines; bi-dimensional decomposition; weighted coefficient of variation;

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  1. Balisacan, Arsenio M. & Fuwa, Nobuhiko, 2003. "Growth, inequality and politics revisited: a developing-country case," Economics Letters, Elsevier, vol. 79(1), pages 53-58, April.
  2. Manasan, Rosario G. & Mercado, Ruben G., 1999. "Regional Economic Growth and Convergence in the Philippines: 1975-1997," Discussion Papers DP 1999-13, Philippine Institute for Development Studies.
  3. Takahiro Akita & Puji Agus Kurniawan & Sachiko Miyata, 2009. "Structural Changes and Regional Income Inequality in Indonesia: A Bi-dimensional Decomposition Analysis," Working Papers EMS_2009_13, Research Institute, International University of Japan.
  4. Joseph J. Capuno, 2012. "Agglomeration And Sub-Regional Disparities Under Decentralization: Evidence Of Spatial Clustering Of Land Values In The Philippines," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 24(3), pages 106-120, November.
  5. Robert J. Barro, 2012. "Inflation and Economic Growth," CEMA Working Papers 568, China Economics and Management Academy, Central University of Finance and Economics.
  6. Mapa, Dennis S. & Balisacan, Arsenio & Briones, Kristine Joy S. & Albis, Manuel Leonard F., 2009. "What really matters for income growth in the Philippines: Empirical evidence from provincial data," MPRA Paper 19449, University Library of Munich, Germany.
  7. Balisacan, Arsenio M. & Fuwa, Nobuhiko, 2004. "Changes in Spatial Income Inequality in the Philippines: An Exploratory Analysis," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  8. Mercado, Ruben G., 2002. "Regional Development in the Philippines: A Review of Experience, State of the Art and Agenda for Research and Action," Discussion Papers DP 2002-03, Philippine Institute for Development Studies.
  9. Takahiro Akita & Sachiko Miyata, 2010. "The bi-dimensional decomposition of regional inequality based on the weighted coefficient of variation," Letters in Spatial and Resource Sciences, Springer, vol. 3(3), pages 91-100, October.
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