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Pathways from Poverty toward Middle Class: Determinants of Socio-economic Class Mobility in the Rural Philippines

Author

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  • Fuwa, Nobuhiko

Abstract

Exploiting a unique set of longitudinal household data collected in a Philippine village over a thirty year period (1962-1994), this paper seeks to identify the pathways of exiting rural poverty and also the determinants of middle class stability. We also test the changes in the returns on assets in exiting poverty after the 1980s. We find that better access to land facilitates accumulation in agriculture while schooling has positive effects on upward mobility in both agricultural and non-agricultural sectors. Macroeconomic growth was, however, the key determinant of poverty-exit probabilities until the early 1980s. After the 1980s, poverty exit-paths through ‘agricultural ladder’ narrowed, schooling and growth became equally crucial determinants due to the increased returns to schooling (mainly due to the expansion of the international migration opportunities), and labor endowments also became important for the lower, but not upper, social strata (providing an economic incentive to have more children for the poor). Unlike the typical findings from poverty dynamics in the US, we find no evidence of state dependence in the poverty spells. This suggests that the village economy under study is quite dynamic so that policy interventions addressing the observed determinants (especially access to education and economic growth) could well go a long way in pulling the poor out of poverty in the rural Philippines.

Suggested Citation

  • Fuwa, Nobuhiko, 2003. "Pathways from Poverty toward Middle Class: Determinants of Socio-economic Class Mobility in the Rural Philippines," MPRA Paper 23690, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:23690
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    File URL: https://mpra.ub.uni-muenchen.de/23690/1/MPRA_paper_23690.pdf
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    References listed on IDEAS

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    Cited by:

    1. Stefan Dercon & Joseph S. Shapiro, 2007. "Moving On, Staying Behind, Getting Lost: Lessons on poverty mobility from longitudinal data," Economics Series Working Papers GPRG-WPS-075, University of Oxford, Department of Economics.

    More about this item

    Keywords

    economic mobility; poverty dynamics; human capital; rural poverty; Philippines;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • 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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