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The Changing Determinants of Schooling Investments: Evidence from Villages in the Philippines, 1985–89 and 2002–04

2009; Taylor & Francis; Volume: 45; Issue: 3 Linguagem: Inglês

10.1080/00220380802265371

1743-9140

Jonna P. Estudillo, Yasuyuki Sawada, Keijiro Otsuka,

Microfinance and Financial Inclusion

Abstract This paper aims to explore the changing determinants of child progress through school over the last two decades using unique long-term household-panel data from four villages in the Philippines. In a regime of low income in the late 1980s, income from farming is the most important source of funds to finance child schooling. As households shift away from farm to non-farm activities and their children pursue higher education, non-farm income and revenues from pawning of land have emerged as main sources of schooling funds in the early 2000s. In this process, farm income has lost its prime importance as a determinant of schooling investments among rural households. Acknowledgements The authors thank the International Rice Research Institute (IRRI) for permission to use the 1985 data set, which was collected by Cristina C. David and Keijiro Otsuka in line with their book Modern Rice Technology and Income Distribution in Asia (David and Otsuka, Citation1994). Geetha Nagarajan and Agnes R. Quisumbing have permitted the authors to use the 1989 data set. The IRRI and the Foundation for Advanced Studies on International Development in Tokyo, Japan have provided generous funding for collecting the 2002 and 2004 data. Jessaine Soraya C. Sugui processed the 2004 data. The usual caveat applies. Notes 1. See David and Otsuka (1994) for a comprehensive analysis of the impact of Green Revolution on household income and its distribution in seven countries in Asia. 2. The 1985 survey was a sub-sample of household population in the villages; the 1989 survey was a revisit of the 1985 respondents; the 2002 survey was a complete enumeration of households in CL2, P1 and P2 but consisted only of 60 per cent of household population in CL1; and the 2004 survey was a complete enumeration of all households in the four villages. The sub-sample in 1985 was selected from the population stratified by farm size for the farm households and by family size for the landless households. The decline in the sample size in 1989 was because of outmigration, absence during the survey, refusal of interview, and death of male and female spouses. 3. Households in the sample villages are fairly representative of a typical rice-growing household in the Central Luzon and Panay Island in terms of farm size, household size and adoption of MVs. Adoption of MVs in P2, however, is much lower in 1985 owing to its unfavourable production environment. 4. Rice yield per ha rose from 4.6 tons in 1985 to 5.6 in 2004 in CL1; from 3.3 tons to 4.4 in CL2; from 4.2 tons to 4.4 in P1; and from 2.0 tons to 3.1 in P2. 5. Sale or usufruct of lands acquired through the land reform is prohibited for 10 years from the time of acquisition (Fabella, Citation2003). According to Hayami and Otsuka (1993), the land reform implementation might have resulted in the inefficiency of land allocation and management among households by suppressing the land rental markets. 6. From 1975 to 1985, pawned in lands comprised 11 per cent of the total number of plots that were transacted between two parties during the period, 23 per cent of which was under owner cultivation and 77 per cent was under usufruct rights of the beneficiaries of the land reform (that is, leasehold tenants and amortising owners). 7. The real value of land under ownership and EP title rose from PHP 561,000 in 1985 to PHP 751,000 in 2004 in CL1, and from PHP 206,000 to PHP 351,000 in P2. The real value of land under leasehold and CLT title rose from PHP 365,000 to PHP 709,000 in CL1; from PHP 276,000 to PHP 347,000 in CL2; from PHP 362,000 to PHP 543,000 in P1. We used the CPI outside Manila as our deflator with a base year in 1993. 8. After attempting various age groupings, we finally adopted the following: between 0–6 years old, 7–12 years, 13–16 years, 17–21 years, 22–30 years, 31–40 years, 41–50 years, 51–60 years, and 61 years old and above. We adopted such groupings because age 0–6 years corresponds to preschool, 7–12 years to primary school, 13–16 years to secondary school, 17–21 years to tertiary school, and 22 years and above to post-school. 9. We estimated the same set of equations using Tobit model because some households do not have non-farm income in 1985. The results of the OLS and Tobit model are fairly similar. 10. Lanzona (1998) found that a self-selection process is underway in both internal and overseas migration where schooling and prior work experience are important factors in the individual decision to leave the parental home to reside outside the village. Internal migration in the rural Philippines is much less costly compared to overseas migration that requires a huge amount of fixed costs that can be financed by the non-farm income and by pawning out farmland. 11. We run separate schooling progression functions for female and male children. The most interesting finding is that the eldest sons obtained significantly greater years of progress in school than the other sons but, this is not the case for the eldest daughter. A stronger sibling rivalry bias exists for sons than for daughters: the number of brothers has a significant negative effect on the progress in school of sons but the number of sisters does not affect the progress in school of daughters.