Template-Type: ReDIF-Paper 1.0 Author-Name: Emmanuel S. de Dios Author-Name-First: Emmanuel Author-Name-Last: de Dios Author-Workplace-Name: School of Economics, University of the Philippines Diliman Author-Name: Katrina Dinglasan Author-Name-First: Katrina Author-Name-Last: Dinglasan Author-Workplace-Name: Philippine Center for Economic Development, Diliman, Quezon City Title: Just how good is unemployment as a measure of welfare? A policy note Abstract: The government is rightly concerned with employment generation to make growth inclusive. The use of the open unemployment rate to measure its success, however, is misplaced. In a developing country with a large informal sector and in the absence of unemployment insurance, open unemployment is primarily a middle-class phenomenon: the unemployed are not predominantly poor, and the poor are not predominantly unemployed. Measures of productivity and shifts of labour across sectors may contain more information. Length: 14 pages Creation-Date: 2014-01 Publication-Status: Published as UPSE Discussion Paper No. 2014-01, January 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1454 File-Format: Application/pdf Number: 201401 Classification-JEL: J21, I32 Keywords: unemployment, underemployment, labour force, welfare, poverty Handle: RePEc:phs:dpaper:201401 Template-Type: ReDIF-Paper 1.0 Author-Name: Raul V. Fabella Author-Name-First: Raul Author-Name-Last: Fabella Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Comprehensive Agrarian Reform Program (CARP): Time to Let Go Abstract: This paper revisits the record of CARP over the quarter century of its existence. By 2014, 5.05 million of the 5.37m hectares of the targeted agricultural land shall have been distributed. As a program for land asset equity, it shall have accomplished 99% of its target, whopper of a success for a government program. As a program to advance the economic welfare of farmers, it has accomplished the opposite of its stated goals. Productivity has fallen drastically in coconut and sugar and poverty incidence among agrarian reform beneficiaries in agrarian reform communities stood at 54% in 2011 higher than for farmers in general. CARP and CARPER has created a new class of people: the landed poor. The paper then explores the many design and implementation flaws that has brought this sad result among which are: CARP’s illegalization of the market for land assets (Section 27) sending Coasean bargains underground and the 5-hectare land ownership ceiling leading to the demise of the legal rural financial market and the flight of private capital. It is time to shift from land equity to farm efficiency. The paper argues for the return of the market in rural production: let productive farmers legally cultivate 10 or more hectares as the market dictates; let PSE-registered firms legally operate agro-industrial farms without land ceiling. Poverty reduction requires the shift of resources and manpower from informal to formal sectors. CARP has done the opposite. To echo the architect of the great Chinese Economic Miracle, Deng Xiaoping: It is time to stop redistributing poverty! Length: 16 pages Creation-Date: 2014-02 Publication-Status: Published as UPSE Discussion Paper No. 2014-02, February 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1455 File-Format: Application/pdf Number: 201402 Keywords: CARP, agrarian reform, agriculture, Coase Theorem, Philippines Handle: RePEc:phs:dpaper:201402 Template-Type: ReDIF-Paper 1.0 Author-Name: Toby C. Monsod Author-Name-First: Toby Author-Name-Last: Monsod Author-Workplace-Name: School of Economics, University of the Philippines Diliman Author-Name: Sharon A. Piza Author-Name-First: Sharon Author-Name-Last: Piza Title: Time to let go of CARP? Not so fast Abstract: The following note seeks to clarify the appreciation of data pertaining to agrarian reform as used in the discussion paper “CARP: time to let go” (henceforth Fabella (2014)). Fabella (2014) has three parts: the first part argues that “the cumulative weight of evidence suggests that the hypothesis that in economic terms CARP is a government failure has not been rejected.” The second part offers possible reasons for that failure. The third part concludes, saying it is time to let go. Length: 8 pages Creation-Date: 2014-03 Publication-Status: Published as UPSE Discussion Paper No. 2014-03, March 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1456 File-Format: Application/pdf Number: 201403 Keywords: CARP, agrarian reform, agriculture Handle: RePEc:phs:dpaper:201403 Template-Type: ReDIF-Paper 1.0 Author-Name: Marina Durano Author-Name-First: Marina Author-Name-Last: Durano Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Rights and Capabilities: Reading the Philippines Magna Carta of Women from the Perspective of the Capabilities Approach Abstract: The Magna Carta of Women (R.A. 7910) is the Philippines comprehensive women’s human rights law. The Magna Carta of Women is found to be consistent with Rawlsian notions of justice, particularly when it undertakes inequality evaluation in primary goods. Identity-based inequality evaluation is also present in the Magna Carta of Women as implied in its definition of discrimination and marginalization. With the state as the primary duty bearer, the Magna Carta of Women gives prominence to an instrumental view of agency since participation is mediated through state mechanisms and institutions. The Magna Carta of Women fails to acknowledge the contributions of care work and the implications of the gendered division of labor. The capabilities approach highlights the challenges attached to these observations. Where human rights are viewed as ethical demands, the MCW succeeds in giving attention to aspects of women’s lives that require state support. Length: 28 pages Creation-Date: 2014-04 Publication-Status: Published as UPSE Discussion Paper No. 2014-04, April 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1457/926 File-Format: Application/pdf Number: 201404 Classification-JEL: K3, J16, K00, D63, I31 Keywords: gender equality, law and economics, human rights, capabilities Handle: RePEc:phs:dpaper:201404 Template-Type: ReDIF-Paper 1.0 Author-Name: Melba V. Tutor Author-Name-First: Melba Author-Name-Last: Tutor Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: The Impact of Philippines’ Conditional Cash Transfer Program on Consumption Abstract: Pantawid Pamilyang Pilipino Program provides cash grants to poor households conditional on pre-determined investments in human capital. This study analyzed its impact on consumption using the 2011 Annual Poverty Indicators Survey. Average treatment effect on the treated (ATT) is estimated through propensity score matching methodology. Heterogeneous impacts are examined among the bottom 20% of income distribution. The study finds that among the total sample, per capita total expenditures is not affected by the program. In per capita monthly terms, only carbohydrates and clothing significantly increased. As expenditure shares, education and clothing registered significant positive impact. No impact is observed on health spending, both in per capita terms and as a share of expenditure. The impact of Pantawid Pamilya on consumption is more pronounced among the poorest fifth of households. Results show that households have responded to program conditionalities but there is very little room to improve consumption of other basic needs. The recent program modification of increasing education grants to older children and covering up to secondary school completion will help households sustain induced behavioral changes over time. Stronger impact on the poorest fifth of households underscores the need to improve the targeting mechanism to address leakage issues. Length: 42 pages Creation-Date: 2014-04 Publication-Status: Published as UPSE Discussion Paper No. 2014-05, April 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1458 File-Format: Application/pdf Number: 201405 Classification-JEL: I38, D12 Keywords: consumption, CCT, impact evaluation, propensity score matching Handle: RePEc:phs:dpaper:201405 Template-Type: ReDIF-Paper 1.0 Author-Name: Charles Yuji Horioka Author-Name-First: Charles Author-Name-Last: Horioka Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Why Do People Leave Bequests? For Love or Self-Interest? Evidence from a New International Survey of Bequest Plans Abstract: This paper discusses three alternative assumptions concerning household preferences (altruism, self-interest, and a desire for dynasty building) and shows that these assumptions have very different implications for bequest motives and bequest division. After reviewing some of the literature on actual bequests, bequest motives, and bequest division, the paper presents data on the strength of bequest motives, stated bequest motives, and bequest division plans from a new international survey conducted in China, India, Japan, and the United States. It finds striking inter-country differences in bequest plans, with the bequest plans of Americans and Indians appearing to be much more consistent with altruistic preferences than those of the Japanese and Chinese and the bequest plans of the Japanese and Chinese appearing to be much more consistent with selfish preferences than those of Americans and Indians. These findings have important implications for the efficacy and desirability of stimulative fiscal policies, public pensions, and inheritance taxes. Length: 38 pages Creation-Date: 2014-05 Publication-Status: Published as UPSE Discussion Paper No. 2014-06 R, May 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1459 File-Format: Application/pdf Number: 201406 Classification-JEL: D12, D14, D64, D91, E21, H31, J14, P52, Z12 Keywords: Bequests, inheritances, estates, inter vivos transfers, intergenerational transfers, bequest motives, bequest division, equal division, altruism, selfishness, selfish life cycle model, altruism model, dynasty model, primogeniture, selfish exchange model, culture, religiosity, religion Handle: RePEc:phs:dpaper:201406 Template-Type: ReDIF-Paper 1.0 Author-Name: Ramon L. Clarete Author-Name-First: Ramon Author-Name-Last: Clarete Author-Workplace-Name: School of Economics, University of the Philippines Diliman Author-Name: Ernesto M. Pernia Author-Name-First: Ernesto Author-Name-Last: Pernia Author-Workplace-Name: School of Economics, University of the Philippines Diliman Author-Name: Ammielou Gaduena Author-Name-First: Ammielou Author-Name-Last: Gaduena Author-Workplace-Name: School of Economics, University of the Philippines Diliman Author-Name: Adrian Mendoza Author-Name-First: Adrian Author-Name-Last: Mendoza Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: The Role of Science, Technology and Research in Economic Development Abstract: Starting with the premise that technological innovation and economic growth are interactive and mutually reinforcing, this paper argues that in order to have a fighting chance in the Asean Economic Community (AEC), let alone global, competition, the Philippines (PH) needs to appreciably ramp up investment spending in science, engineering, and research and development. To the extent that this is achieved – along with the other ongoing policy and institutional reforms – the economy could in time be on a stronger platform to face up to AEC challenges. The paper first revisits PH’s macro-economy, poverty, and economic sectors vis-à-vis its Asean and East Asian neighbors. Next, it examines PH’s regional and global competitiveness. Then, it looks into the country’s current human resource and intellectual capital investments, mainly in higher education and technical/vocational training, as well as in R&D and innovation. A more focused discussion on the University of the Philippines – the “national university” – vis-à-vis its comparators in AEC, including ways to improve its competitiveness, follows. The final section concludes with some recommendations. Length: 26 pages Creation-Date: 2014-06 Publication-Status: Published as UPSE Discussion Paper No. 2014-07, June 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1459 File-Format: Application/pdf Number: 201407 Classification-JEL: F15, J24, O, O3, O31 Keywords: Science and technology (S & T), Research and development (R & D), Economic development, Higher education institutions (HEIs), Economic integration, Asean, Philippines Handle: RePEc:phs:dpaper:201407 Template-Type: ReDIF-Paper 1.0 Author-Name: Geoffrey M. Ducanes Author-Name-First: Geoffrey Author-Name-Last: Ducanes Author-Workplace-Name: School of Economics, University of the Philippines Diliman Author-Name: Edita Abella Tan Author-Name-First: Edita Author-Name-Last: Tan Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Who Are Poor and Do They Remain Poor? Abstract: This paper examines the link between poverty and income, on the one hand, and human capital and location, on the other. In the process, the paper proposes a shift in the household indicator of human capital from the usual education of the household head to the education of the most educated member. The paper finds poverty to be most severe and persistent for households with low human capital, and that the effect of human capital varies substantially across locations. Additionally, the paper finds that low human capital households tend to underinvest in the human capital of school-age members, thus likely perpetuating poverty. Length: 29 pages Creation-Date: 2014-06 Publication-Status: Published as UPSE Discussion Paper No. 2014-08, June 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1461/933 File-Format: Application/pdf Number: 201408 Classification-JEL: I32, J24, I21, R11 Keywords: human capital, poverty, chronic poverty, regional development, enrolment rates Handle: RePEc:phs:dpaper:201408 Template-Type: ReDIF-Paper 1.0 Author-Name: Ernesto M. Pernia Author-Name-First: Ernesto Author-Name-Last: Pernia Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Population Management, RH Law, and Inclusivity Abstract: Taking off from the self-evident fact that the population variable centrally figures in both labor and product markets, this paper argues that the growth rate of population, its age structure and spatial distribution should be key considerations in a country’s development strategy to promote rapid and sustained economic growth, full employment, poverty reduction, and social inclusion. This represents a shift from the inordinate emphasis on the demand for labor, i.e., job creation. Significantly reducing unemployment and poverty can be achieved not solely through job generation but also by managing the quantity and quality of the work force, which is determined, with a lag, by the growth rate and structure of the population. The paper provides a perspective on population as it impacts the labor market and poverty. It then discusses issues of fertility and unmet needs for family planning and reproductive health services in relation to poverty. A sidelight on pressing concerns (gender-based violence and lack of RH services) brought about by Super-typhoon Yolanda is presented. This is followed by a glimpse into regional experience in population policy, family planning and poverty as exemplified by Thailand and Bangladesh. The penultimate section provides simulations and projections using different assumptions of contraceptive prevalence rates that result in various scenarios of fertility and population growth. Length: 22 pages Creation-Date: 2014-06 Publication-Status: Published as UPSE Discussion Paper No. 2014-09, June 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1462/934 File-Format: Application/pdf Number: 201409 Classification-JEL: J1, J2, J6, O1, O2 Handle: RePEc:phs:dpaper:201409 Template-Type: ReDIF-Paper 1.0 Author-Name: Charles Yuji Horioka Author-Name-First: Charles Author-Name-Last: Horioka Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: The Life and Work Of Martin Stuart (“Marty”) Feldstein Abstract: Martin Stuart (“Marty”) Feldstein, currently George F. Baker Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research, Inc. (NBER), is a renowned American economist who has made important contributions to public finance, macroeconomics, social insurance, health economics, the economics of national security, and many other fields of economics. Length: 17 pages Creation-Date: 2014-07 Publication-Status: Published as UPSE Discussion Paper No. 2014-10, July 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1464/936 File-Format: Application/pdf Number: 201410 Classification-JEL: B31, D14, D22, F21, F32, F52, H20, H55, I13, J65 Keywords: Capital accumulation, capital flows, capital gains, capital mobility, charitable contributions, Council of Economic Advisers, depreciation, Feldstein-Horioka paradox, Feldstein-Horioka puzzle, Harvard University, health economics, health insurance Handle: RePEc:phs:dpaper:201410 Template-Type: ReDIF-Paper 1.0 Author-Name: Felipe M. Medalla Author-Name-First: Felipe Author-Name-Last: Medalla Author-Workplace-Name: School of Economics, University of the Philippines Diliman Author-Name: Raul V. Fabella Author-Name-First: Raul Author-Name-Last: Fabella Author-Workplace-Name: School of Economics, University of the Philippines Diliman Author-Name: Emmanuel S. de Dios Author-Name-First: Emmanuel Author-Name-Last: de Dios Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Beyond the remittances-driven economy: Notes as if the long run mattered Abstract: This paper discusses the causes and consequences of the current trend in which a principal driver of growth is inward remittances by workers deployed overseas. The main benefit of the phenomenon is an easing of the fiscal burden arising from the effectively large transfer from workers to the government. On the other hand, the “Dutch Disease” it causes takes a longterm toll on the tradables sector. The paper concludes that the fiscal payoffs from the phenomenon are best used by reinvesting these in the foundations of domestic competitiveness—particularly education and focused infrastructure—to offset the worst effects of the trend and prepare prudently for the time it ends or reverses. Length: 35 pages Creation-Date: 2014-08 Publication-Status: Published as UPSE Discussion Paper No. 2014-11, August 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1465/941 File-Format: Application/pdf Number: 201411 Classification-JEL: B52, F22, F240, O240, O530, R42 Keywords: Philippine economy, labour migration, migrant remittances, remittances-driven economy, services sector, exchange rate, Dutch Disease, “divide-by- N” syndrome, transport infrastructure, political infrastructure cycle, political institutions Handle: RePEc:phs:dpaper:201411 Template-Type: ReDIF-Paper 1.0 Author-Name: Charles Yuji Horioka Author-Name-First: Charles Author-Name-Last: Horioka Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Evolutionary Economics and Household Behavior Abstract: This paper provides an introduction to the field of evolutionary economics with emphasis on the evolutionary theory of household behavior. It shows that the goal of evolutionary economics is to improve upon neoclassical economics by incorporating more realistic and empirically grounded behavioral assumptions and technological innovation and that the goal of the evolutionary theory of household behavior is to improve upon the neoclassical theory of household behavior by replacing the neoclassical assumption of selfish utility maximization with bounded rationality and satisficing and by incorporating the reaction of households to the introduction of new goods and services. The paper concludes with a brief discussion of loss aversion and self-interest vs. altruism. Length: 17 pages Creation-Date: 2014-08 Publication-Status: Published as UPSE Discussion Paper No. 2014-12, August 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1466/942 File-Format: Application/pdf Number: 201412 Classification-JEL: A12, B15, B25, B52, D11, D91, E21, O31, O33 Keywords: Altruism, altruistic bequest motive, behavioral assumptions, behavioral economics, bequest motives, bounded rationality, consumption behavior, creative destruction, destructive technologies, dynastic bequest motive, evolution, evolutionary economics Handle: RePEc:phs:dpaper:201412 Template-Type: ReDIF-Paper 1.0 Author-Name: Raul V. Fabella Author-Name-First: Raul Author-Name-Last: Fabella Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: The Picketty Inequality in the Nash-Bargained Social Contract Abstract: As a proxy for a Pareto-efficient market economy, we adopt the two-party Nash Bargaining model featuring a qualitative bias in the treatment of the contributions of the parties. The Piketty inequality here is the share in total welfare accruing to the richer party over total welfare attained at agreement point. We show that this inequality can never exceed the inequality in initial contributions if the qualitative bias is zero. The rising Piketty inequality requires that the qualitative bias exceed a positive threshold. The Piketty trajectory emerges if the qualitative bias oscillates around the threshold due to changing social and economic environment. Length: 10 pages Creation-Date: 2014-09 Publication-Status: Published as UPSE Discussion Paper No. 2014-13, September 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1467/943 File-Format: Application/pdf Number: 201413 Classification-JEL: C78, D31, D63, D71 Keywords: Piketty, Inequality, Nash Bargaining Handle: RePEc:phs:dpaper:201413 Template-Type: ReDIF-Paper 1.0 Author-Name: Fidelina B. Natividad-Carlos Author-Name-First: Fidelina Author-Name-Last: Natividad-Carlos Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Exchange-Rate Overshooting: An Analysis for Intermediate Macro Abstract: While exchange rate dynamics is an important topic in open economy macroeconomics, the standard tool commonly used to introduce exchange rate dynamics - the Dornbusch (1976) seminal paper along with phase diagram - is not well-suited for undergraduate students as most of them do not have yet a background on dynamic macroeconomic analysis. This paper attempts to provide a graphical device – a panel IS*-LM* diagram – which can be used to teach intermediate macroeconomics students about Dornbusch’s idea of exchange rate dynamics. In addition, it also attempts to bridge the gap between undergraduate teaching and graduate teaching of exchange rate dynamics by showing the correspondence between the economy’s adjustment path in the IS*-LM* diagram and that in the phase diagram. Length: 33 pages Creation-Date: 2014-10 Publication-Status: Published as UPSE Discussion Paper No. 2014-14, October 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1468 File-Format: Application/pdf Number: 201414 Classification-JEL: A230, F310, F410 Keywords: undergraduate teaching, graduate teaching, exchange rates, exchange rate dynamics, sticky prices, interest parity, open economy macroeconomics, fiscal policy, monetary policy Handle: RePEc:phs:dpaper:201414 Template-Type: ReDIF-Paper 1.0 Author-Name: Gary B. Teves Author-Name-First: Gary Author-Name-Last: Teves Title: Improving Credit Access for the Food and Agriculture Sector through Enhanced Implementation of Existing Policies and New Strategies Abstract: For several decades, the government has sought to develop the agriculture sector through programs like agrarian reform, agricultural modernization and rural finance, but farmers and fisherfolk remain to be the poorest sector in the Philippines. This paper seeks to explore ways to improve small farmers and fisherfolks’ access to credit provided by formal financial institutions. The government needs to implement and improve on its existing programs, identified in this study, and combine these with policy reforms and new strategies to fast-track the development of the food and agriculture sector to make economic growth more inclusive. Length: 30 pages Creation-Date: 2014-11 Publication-Status: Published as UPSE Discussion Paper No. 2014-15, November 2014 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1469/946 File-Format: Application/pdf Number: 201415 Classification-JEL: G21, O13, Q14 Keywords: Agriculture, Financial Institutions and Services, Agricultural Finance, Agricultural Credit Handle: RePEc:phs:dpaper:201415 Template-Type: ReDIF-Paper 1.0 Author-Name: Marjorie C. Pajaron Author-Name-First: Marjorie Author-Name-Last: Pajaron Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Remittances, informal loans, and assets as risk-coping mechanisms: Evidence from agricultural households in rural Philippines Abstract: This paper investigates whether agricultural households in rural Philippines insure their consumption and whether they use remittances, informal loans, or assets as ex post risk-coping mechanisms. Since these households have limited access to formal insurance and credit markets, any shocks to their volatile income can have substantial impacts. Using panel data and rainfall shocks as the instrumental variable for income shocks, this paper finds evidence that households depend on their networks of family and friends to partially insure their consumption. 2SLS and OLS estimates show that approximately 27 percent of consumption is insured. International remittances from migrant members replace about 11 percent of income decline while domestic transfers replace about 14 percent. Informal loans, however, decrease as rainfall shocks increase. Borrowers and lenders may be experiencing similar shocks, which would reduce the effectiveness of local risk-sharing arrangements. Length: 35 pages Creation-Date: 2014-12 Publication-Status: Published as UPSE Discussion Paper No. 2014-16, December 2014 Number: 201416 Classification-JEL: O12, Q12, D81, D12, F22, F24 Keywords: Risk-coping, Remittance, Informal loan, Consumption insurance, Rainfall shocks, Philippines Handle: RePEc:phs:dpaper:201416