Poor parents, rich children: the role of schooling, non farm work, and migration in rural Philippines

Abstract

This paper explores how migration to local towns, big cities, and overseas has halted the transmission of poverty from parents to children in rural Philippines. Parents’ income has come mainly from agricultural sources while children’s income has come largely from nonfarm sources. Initially, poverty is higher among the landless households. Children from poor landless households are able to find their way out of poverty by acquiring more education, participating in rural nonfarm labor market, and migrating to big cities, local towns, and overseas. Migrant children have higher total income coming mainly from nonfarm income, which is significantly affected by education. In brief, this study demonstrates the rise in economic importance of education and the decline in economic importance of farmland in explaining economic mobility.

JEL classification: I30, I24, O115, O17, Q15