The increasing number of Filipinos until 2020 have led to more of them entering the labor force particularly the youth. In seven years, it is projected that the country’s average employment-to-population ratio of 0.61, or more than half of the labor force are employed, is a proof showing the capability of the labor market to provide job opportunities to each member of the labor force. Not only just in delivering employment but also on the quality of each opportunities imparted to Filipinos, as presented in Figure 3 in which the number of wage and salaried workers are greater than self-employed workers. Most of the employment opportunities are in or will be coming from the services sector, wherein 1 out of 2 workers are employed on a part-time working arrangement. However, despite the massive employment generated or will be generated in this sector, still the agricultural sector displays sign of stagnation in terms of providing jobs to Filipinos. The Philippines, primarily an agricultural country due to its adequate supply of natural resources particularly land, should need to put forth more development efforts to its agricultural sector. Further, even though the Philippine does not have any anti-discrimination in the account of gender law, the number of male over female workers across sectors appear to be in an equilibrium state (Figure 4). On the other hand, the increasing number of Filipinos employed jobs with low skills and educational requirements is a concrete justification to the thrust of the country’s current administration of extending the basic years of education, from 10 to 12 years, through the passage of K to 12 law.
Putting forward observations on a macro-level perspective, the Philippines’ unemployment rate has demonstrated a pattern of downtrend, as examined in periods 2012 and 2014. This observation is also noticeable on the youth unemployment rate, wherein in 2014 the rate hits its lowest in the last five years. Therefore, the sound findings observed involving these macroeconomic variables have imparted an unprecedented boost to the productivity of the country’s human resources that in effect steered the Philippines to a better economic performance.
Based on the results generated by the model, the model if lagged from 1 up to 2 years, there will be a “slightly under-forecast” unemployment rates. On the other hand, in using the GET model, the forecasted unemployment rates from 2015 to 2019 tend to follow an upward trend, as opposed to the projected rates computed by the PEPM.
The contrasting coefficients generated by regression using the Philippines’ unemployment rate as dependent variable and its GDP growth rate as independent variable have explained the assumption of Okun’s Law, wherein a country that produces more output may possibly create more jobs leading to a decrease in its unemployment rate.
Title: Macroeconomics and Modelling for Labor Market Analysis: Philippines Employment Projection Model and Key Indicators of the Labor Market
Researchers: Carl Rookie O. Daquio || Ivan Cassidy F. Villena || Paulina Kim Pacete