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Human Capital Investment and Poverty Reduction over Generations: A Case from the Rural Philippines, 1979-2003

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  • Takahashi, Kazushi
  • Otsuka, Keijiro

Abstract

This paper attempts to identify a pathway out of poverty over generations in the rural Philippines, based on long-term panel data spanning for nearly a quarter of a century. Specifically, it sequentially examines the determinants of schooling, subsequent occupational choices, and current non-farm earnings for the same individuals. We found that an initial rise in parental income, brought about by the land reform and the Green Revolution, among other things, improves the schooling of children, which later allows them to obtain remunerative non-farm jobs. These results suggest that the increased agricultural income, improved human capital through schooling and the development of non-farm sectors are the keys to reducing poverty in the long run. It must be also pointed out that the recent development of the rural non-farm sector offers ample employment opportunities for the less educated, which also significantly contributed to the poverty reduction.

Suggested Citation

  • Takahashi, Kazushi & Otsuka, Keijiro, 2007. "Human Capital Investment and Poverty Reduction over Generations: A Case from the Rural Philippines, 1979-2003," IDE Discussion Papers 96, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper96
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    References listed on IDEAS

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    2. Quisumbing, Agnes R. & Estudillo, Jonna P. & Otsuka, Keijiro, 2004. "Land and schooling: transferring wealth across generations," Food policy statements 41, International Food Policy Research Institute (IFPRI).
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    7. Nobuhiko Fuwa, 2007. "Pathways out of rural poverty: a case study in socio-economic mobility in the rural Philippines," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 31(1), pages 123-144, January.
    8. Otsuka, Keijiro & Gascon, Fe & Asano, Seki, 1994. "'Second-generation' MVs and the evolution of the green revolution: the case of Central Luzon, 1966-1990," Agricultural Economics, Blackwell, vol. 10(3), pages 283-295, May.
    9. Otsuka, Keijiro, 1991. "Determinants and consequences of land reform implementation in the Philippines," Journal of Development Economics, Elsevier, vol. 35(2), pages 339-355, April.
    10. Keijiro Otsuka & Takashi Yamano, 2006. "Introduction to the special issue on the role of nonfarm income in poverty reduction: evidence from Asia and East Africa," Agricultural Economics, International Association of Agricultural Economists, vol. 35(s3), pages 393-397, November.
    11. Jennifer Lauby & Oded Stark, 1988. "Individual Migration as a Family Strategy: Young Women in the Philippines," Population Studies, Taylor & Francis Journals, vol. 42(3), pages 157-173.
    12. Schultz, Theodore W, 1980. "Nobel Lecture: The Economics of Being Poor," Journal of Political Economy, University of Chicago Press, vol. 88(4), pages 639-651, August.
    13. Estudillo, Jonna P & Otsuka, Keijiro, 1999. "Green Revolution, Human Capital, and Off-Farm Employment: Changing," Economic Development and Cultural Change, University of Chicago Press, vol. 47(3), pages 497-523, April.
    14. Eswaran, Mukesh & Kotwal, Ashok, 1994. "Why Poverty Persists in India: A Framework for Understanding the Indian Economy," OUP Catalogue, Oxford University Press, number 9780195632385.
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    Cited by:

    1. Jonna Estudillo & Tomoya Matsumoto & Chowdhury Zia Uddin Hayat & Nandika S. Kumanayake & Keijiro Otsuka, 2013. "Labor markets, occupational choice, and rural poverty in four Asian countries," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 50(1), pages 23-44, June.
    2. Otsuka, Keijiro & Estudillo, Jonna P. & Yamano, Takashi, 2010. "The Role of Labor Markets and Human Capital in Poverty Reduction: Evidence from Asia and Africa," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 7(1), pages 1-18, June.
    3. Okabe, Masayoshi, 2014. "Gender-preferential intergenerational patterns in primary education attainment : a quantitative analysis of a case of rural Mindanao, the Philippines," IDE Discussion Papers 479, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    4. Takahashi, Kazushi, 2013. "Pro-poor growth or poverty trap? : estimating intergenerational income mobility in rural Philippines," IDE Discussion Papers 382, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    5. ERREYGERS, Guido & FEREDE, Tadele, 2009. "The end of subsistence farming: Growth dynamics and investments in human and environmental capital in rural Ethiopia," Working Papers 2009008, University of Antwerp, Faculty of Business and Economics.

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    More about this item

    Keywords

    Intergenerational poverty dynamics; Child schooling; Occupational choice; Non-farm earnings; Philippines; Poverty; Rural societies; Human resources; 世代間の貧困動態; 児童教育; 学校教育; 就業選択; 職業選択; 非農業所得; 非農業賃金; フィリピン; 貧困; 農村; 人的資源;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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