Browsing by Author "Fernandez, Joan Eunise A."
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Item Restricted The effect of middle class size on GDP growth in the Philippines(2016-12) Fernandez, Joan Eunise A. ; Frias, Renzi G. ; Ravago, Majah-Leah V.Despite the significant changes in the size of the middle-income class, it still gains little attention in the context of the Philippines. As its demographic changes through time, it also impacts the country’s economic growth. Using panel data from 16 regions for the period 1985-2012, we study the relationship between the Philippine middle-income class and GDP growth. We use instrumental variable (IV) estimation, specifically the two-stage least squares method, to quantify the effect of the changes in the middle class size on Philippine economic growth and vice versa. The instruments that we use are fuel consumption for regional GDP and the percentage of households with strong roofing for middle class. Similar with studies from other countries, the results show that there is a positive relationship between the middle class size and economic growth. We find that in the Philippines, expansion of the middle class contributes to economic growth and conversely, economic growth expands the middle class.