Winner-Takes-All: Access to Education and Labor Market Returns in the Philippines
This thesis seeks to understand how inequalities in access to education and labor market returns have evolved over time in the Philippines. Using the Origin-Education-Destination (OED) triangle as frame (see for example, Breen & Goldthorpe, 1997; Breen & Jonsson, 2005; Bukodi & Goldthorpe, 2018), the study disentangles the extent to which social background continues to influence educational attainment and labor market returns, while analyzing the contemporary role of higher education in eliminating or amplifying inequities.
The study is critical for three reasons. First, access to education expanded steadily in the Philippines since the 1940s, akin to the experience of many other systems following the Second World War. The recent surge in higher education enrolment however is unprecedented, and likely to accelerate given legislation in 2018 to abolish tuition in all public higher education institutions. Second, this massification in access occurred through intense public provision, in a country known to have one of the largest private higher education systems in the world (Levy, 2018) where cost is known to rise with quality (A. Orbeta, 2002). Third, sustained educational expansions were paralleled by a less robust course of economic development, marked by the country’s protracted transition from agriculture to industry since the 1950s, and punctuated by severe economic recessions and overall volatility.
Taking advantage of available data from the Philippine government and the World Bank (STEP Skills Survey), the thesis employs a quantitative approach to estimate trends in educational attainment and labor market returns, as they relate to higher education characteristics. This is an area unexplored by current research in the Philippines, despite its likely consequences on equity considering the diversity of the 2,396 higher education institutions in the country. The study further interrogates whether the prevalent belief that expanding access to education could promote equality of opportunity and enable intergenerational mobility-- as observed in many industrial economies, and prescribed as a model for modern growth following the Second World War-- is operable in the case of a lower middle-income country like the Philippines.
The first empirical chapter of this thesis studies the relationship between social origins and educational attainment (O-E). Specifically, it investigates whether sustained expansions in access between 1945 to 2015 contributed towards diminishing the role of social background on educational attainment, consistent with findings elsewhere. The second empirical chapter then probes how these expansions impacted private returns to education of graduates (E-D), inquiring whether the recent surge in higher education enrolment depressed returns as proposed by Human Capital Theory. Finally, the third empirical chapter examines the “equalizing power” of a college degree in the Philippine context, assessing the extent to which higher education mediates the relationship between origins and destinations (O-D). More importantly, the chapter provides a first look at how higher education characteristics relate to the likelihood of disadvantaged graduates reaching “middle-income” status in the Philippines.
The analysis finds that educational expansions were unable to mitigate inequities in attainment in the country, with social background continuing to relate strongly to secondary and higher education completion. Further, contrary to the expectation that educational expansions would alter the composition of the labor market and lead to a drastic decline in returns, the study finds that recent trends relate mainly to the shift in economic opportunities from agriculture to services. Notably, while inequities in returns narrowed among graduates with varying levels of educational attainment between 2005 and 2019, the thesis discovers that inequities worsened among college graduates, with high-wage workers accruing substantially larger returns than their low-wage peers—a striking contrast from a previous study in 2010. Against this backdrop, the study finds that the “equalizing power” of a college degree is apparent, but only for first- generation college graduates of public and non-profit, “high-status” institutions. For said graduates, a college degree appears to negate the disadvantage related to social origins once in the labor market, as found in literature elsewhere. For the bulk however completing in “regular” institutions, higher education appears unable to support upward mobility, with early-career graduates unlikely to accrue similar returns as their advantaged peers, and unlikely to reach “middle-income” status, despite completing college.
Overall, the thesis finds that opportunities remain unequal in the Philippines, with social origins remaining strongly associated to both educational attainment and labor market outcomes. The study also finds that higher education has a “stratifying” instead of an “equalizing” effect in the country, intensifying the role of social background when it comes to returns. The thesis concludes by offering recommendations aimed at improving the progressiveness of government policies and programs. These include supporting disadvantaged students in completing secondary education and gaining admission in “high-status” colleges and universities, strengthening the capacity of the Commission on Higher Education in regulating and supporting the country’s exceptionally diverse higher education sector, as well as focusing on the creation of high-skill jobs.