Exploiting a unique set of longitudinal household data collected in a
Philippine village over a thirty year period (1962-1994), this paper
seeks to identify the pathways of exiting rural poverty and also the
determinants of middle class stability. We also test the changes in the
returns on assets in exiting poverty after the 1980s. We find that
better access to land facilitates accumulation in agriculture while
schooling has positive effects on upward mobility in both agricultural
and non-agricultural sectors. Macroeconomic growth was, however, the key
determinant of poverty-exit probabilities until the early 1980s. After
the 1980s, poverty exitpaths through 'agricultural ladder' narrowed,
schooling and growth became equally crucial determinants due to the
increased returns to schooling (mainly due to the expansion of the
international migration opportunities), and labor endowments also became
important for the lower, but not upper, social strata (providing an
economic incentive to have more children for the poor). Unlike the
typical findings from poverty dynamics in the US, we find no evidence of
state dependence in the poverty spells. This suggests that the village
economy under study is quite dynamic so that policy interventions
addressing the observed determinants (especially access to education and
economic growth) could well go a long way in pulling the poor out of
poverty in the rural Philippines.
Pathways from poverty towards middle class: determinants of soico-economic class mobility in the rural Philippines, presented at Staying Poor: Chronic Poverty and Development Policy, Institute for Development Policy and Management, University of Manchester, 7-9 April 2003. Chronic Poverty Research Centre (CPRC), Manchester, UK, i + 42 pp.
Pathways from poverty towards middle class: determinants of soico-economic class mobility in the rural Philippines.