Posted on November 10, 2011 06:43:30 PM
Jackson L. Ubias, IDEA
THE ANNUAL Poverty Indicator Survey bares some statistics that should be cause for alarm. It reports the incidence of out-of-school youth (OSY) in 2010 at 15.5 percent, equivalent to six million Filipinos.
Eight years ago, the incidence was at 14.7 percent or equivalent
to 4.8 million Filipinos, representing an annual average growth of 2.5
percent from 2002 to 2010. OSY were family members aged 6 to 17 years
old who were not attending school and those 18 to 24 years old who were
not connected to school or work and have not earned a college or any
post-high school diploma.
Decomposing the statistics by income quintile, the OSY rate is expectedly highest for the poorest 10 percent of households at 20.6 percent, significantly higher than the national rate. The rate remains higher-than-national for the second quintile at 17.8 percent. The incidence of OSY continually diminishes with income; with this, the slowing in educational attainment and education inequality could promote wider income inequality in the future.
A little over three fourths of the OSY are in the 16-24 age band or family members who should be attending or have completed tertiary schooling. The high cost of education is the leading barrier to school attendance as cited by 31.8 percent in the group. They face problems gaining college diplomas; simultaneously, their lack of college diploma aggravates their prospect of being gainfully employed.
While the prospective income of an individual depends on wide-ranging socio-economic attributes, it is indisputable that education is a crucial factor to easing access to job opportunities and higher wages. The increased income implies more taxes that the government can collect to finance public goods for the benefit of the many. This should provide the motivation for the government to strengthen its subsidy program for higher education, say scholarships, to those who cannot afford to attend school.
It is surprising that even as basic education is deemed free and compulsory as ordered by the Free Public Secondary Education Act of 1988 and the Governance of Basic Education Act of 2001, a third of the OSY belonged to the 6-15 age band. A fourth of this group cited high cost of education as the reason for not attending school. The costing might have considered indirect costs related to school attendance like transportation and allowances for meals and school projects. Complementary infrastructure should help minimize indirect costs to education while programs like the conditional cash transfer to poor households could guide their resource allocations for education as the cash transfer is conditional on the school attendance of a child.
What comes as an interesting result of the survey is the high prevalence of lack of personal interest among the 6-15-year old OSY as the reason for not attending school. The rate is at 46.6 percent and is more prevalent among boys. While incidence is smaller for the 16-24-year old OSY at 21.2 percent, the pervasiveness of lack of personal interest towards schooling among OSY is worrying.
On the demand side, perhaps OSY have underestimated the economic value of education. For actual investment on human capital to take place, costs should at least match the expected returns. The incidence of lack of personal interest could imply that the gains in productivity owed to education are hardly reflected in wages. Signaling theory supports this, stating that education does not necessarily improve a person’s productivity but merely uses it to signal that he or she possesses high productivity. In reality, however, this may not apply as there has been evidence that increments to wages has been at 15 percent for an additional year of schooling in the Philippines, higher than the average 5 percent return in the 28 country samples used by Trostel, Walker, and Woolley in their study(see Trostel, P., Walker, I. & Woolley, P. (2002). Estimates of the economic returns to schooling for 28 countries. Labour Economics, 9, 1-16.).
A look on the supply side of the problem may shed clearer indications. It could be that schools are ineffective in addressing the needs of students. One of the biggest problems in the local public school system is congestion. More often, this problem is construed as thinning the quality of education. Both shortages of classrooms and teachers could have robbed students’ passion for learning.
The trend in OSY incidence should be reversed. Failure to educate the youth could cost an opportunity to enhance economic growth and trim poverty. On the condition that higher educational attainment fosters more rapid economic growth, it is investments in education now --particularly in comprehensive scholarship programs, school buildings, and quality teaching-- that sustains investments in human capital towards higher economic in the future.
The Institute for Development and Econometric Analysis (IDEA), Inc. is a non-stock, non-partisan institution dedicated to high-quality economic research, instruction, and communication. For questions and inquiries, please contact Remrick Patagan via ideainc.mail@gmail.com or telefax no. 920-6872.
Decomposing the statistics by income quintile, the OSY rate is expectedly highest for the poorest 10 percent of households at 20.6 percent, significantly higher than the national rate. The rate remains higher-than-national for the second quintile at 17.8 percent. The incidence of OSY continually diminishes with income; with this, the slowing in educational attainment and education inequality could promote wider income inequality in the future.
A little over three fourths of the OSY are in the 16-24 age band or family members who should be attending or have completed tertiary schooling. The high cost of education is the leading barrier to school attendance as cited by 31.8 percent in the group. They face problems gaining college diplomas; simultaneously, their lack of college diploma aggravates their prospect of being gainfully employed.
While the prospective income of an individual depends on wide-ranging socio-economic attributes, it is indisputable that education is a crucial factor to easing access to job opportunities and higher wages. The increased income implies more taxes that the government can collect to finance public goods for the benefit of the many. This should provide the motivation for the government to strengthen its subsidy program for higher education, say scholarships, to those who cannot afford to attend school.
It is surprising that even as basic education is deemed free and compulsory as ordered by the Free Public Secondary Education Act of 1988 and the Governance of Basic Education Act of 2001, a third of the OSY belonged to the 6-15 age band. A fourth of this group cited high cost of education as the reason for not attending school. The costing might have considered indirect costs related to school attendance like transportation and allowances for meals and school projects. Complementary infrastructure should help minimize indirect costs to education while programs like the conditional cash transfer to poor households could guide their resource allocations for education as the cash transfer is conditional on the school attendance of a child.
What comes as an interesting result of the survey is the high prevalence of lack of personal interest among the 6-15-year old OSY as the reason for not attending school. The rate is at 46.6 percent and is more prevalent among boys. While incidence is smaller for the 16-24-year old OSY at 21.2 percent, the pervasiveness of lack of personal interest towards schooling among OSY is worrying.
On the demand side, perhaps OSY have underestimated the economic value of education. For actual investment on human capital to take place, costs should at least match the expected returns. The incidence of lack of personal interest could imply that the gains in productivity owed to education are hardly reflected in wages. Signaling theory supports this, stating that education does not necessarily improve a person’s productivity but merely uses it to signal that he or she possesses high productivity. In reality, however, this may not apply as there has been evidence that increments to wages has been at 15 percent for an additional year of schooling in the Philippines, higher than the average 5 percent return in the 28 country samples used by Trostel, Walker, and Woolley in their study(see Trostel, P., Walker, I. & Woolley, P. (2002). Estimates of the economic returns to schooling for 28 countries. Labour Economics, 9, 1-16.).
A look on the supply side of the problem may shed clearer indications. It could be that schools are ineffective in addressing the needs of students. One of the biggest problems in the local public school system is congestion. More often, this problem is construed as thinning the quality of education. Both shortages of classrooms and teachers could have robbed students’ passion for learning.
The trend in OSY incidence should be reversed. Failure to educate the youth could cost an opportunity to enhance economic growth and trim poverty. On the condition that higher educational attainment fosters more rapid economic growth, it is investments in education now --particularly in comprehensive scholarship programs, school buildings, and quality teaching-- that sustains investments in human capital towards higher economic in the future.
The Institute for Development and Econometric Analysis (IDEA), Inc. is a non-stock, non-partisan institution dedicated to high-quality economic research, instruction, and communication. For questions and inquiries, please contact Remrick Patagan via ideainc.mail@gmail.com or telefax no. 920-6872.
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