The role of labor market in explaining growth and inequality in income: the Philippines’ case

Abstract

This paper analyses the relationship between growth and inequality of household income in the Philippines, focusing on the role played by the labor market. It proposes a decomposition methodology that explores linkages between growth in income and labor market performances in terms of labor force participation, employment, work hours, and productivity. This paper introduces a methodology that shows a direct linkage between growth and inequality in income, and labor market characteristics. The paper provides empirical analysis using both the Family Income and Expenditure Survey (FIES) and the Labor Force Survey (LFS), covering the period 1997-2003.

JEL classification: D3, D6, J2, J3, J7