Republic of the Philippines Labor Market Review : Employment and Poverty
This study analyzes labor market performance in the Philippines from the perspective of workers’ welfare. It argues that pervasive in-work poverty is the main challenge facing labor policy. Poverty is primarily due to low earning capacity of the po...
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/01/25818617/philippines-labor-market-review-employment-poverty-philippines-labor-market-review-employment-poverty http://hdl.handle.net/10986/24768 |
| Summary: | This study analyzes labor market
performance in the Philippines from the perspective of
workers’ welfare. It argues that pervasive in-work poverty
is the main challenge facing labor policy. Poverty is
primarily due to low earning capacity of the poor and to
their limited access to regular and productive jobs. Behind
these are the two interrelated root causes of in-work
poverty - low education of the poor, and the scarcity of
productive job opportunities. The labor market is segmented
into good and bad jobs, with the poor working in the latter.
They hold jobs that are informal, temporary or casual, and
low-paid. Widespread informality means that the poor neither
benefit from the minimum wage policy nor from employment
protection legislation. They do not benefit from wage growth
either, because their bargaining power is weak. Good jobs
are so few, especially in rural areas, that even better
educated workers are often forced to take unskilled jobs and
work as low-paid laborers. The reduction of in-work poverty
hinges on removing constraints to gainful employment in both
supply side (better education and skills) and demand side
(better jobs). It is critical that the young poor have
improved access to quality education, and be equipped with
skills required in the modern sector of the economy. But in
parallel, better jobs need to be created, which can be
attained from the growth of the formal and higher value
added sector of the economy. The process of structural
transformation should be supported by effective labor
policy. Labor regulations need to be made simpler and more
flexible to facilitate the reallocation of labor from less
to more productive activities, and from informal to formal
sector. Targeted training programs have the potential to
address the problem of low skills among the poor workers,
especially the young ones. Such programs should be developed
on a pilot basis and expanded if proven to be cost-effective. |
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