The effects of income versus parental valuation on Philippine household spending on education
Date
2014-04-04
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Abstract
Household spending on education becomes increasingly significant as out-of-pocket financing for education becomes inevitable. With limited public resources to finance the expansion of public education, examining household spending for education gains more importance. This study aims to examine household financing for schooling by comparing income and parental valuation effects on Philippine household spending on education. Using 2011 Annual Poverty Indicators Survey, Heckman selection model suggests these findings: (1) education spending at household level generally increases with family income and parental valuation, (2) marginal household spending on education significantly varies across income groups and across levels of parental valuation, and (3) on average, income effect dominates parental valuation effect in household's decision to invest on education. However, magnitude of income and parental valuation effects varies for different estimate groups involved in the decomposition analysis. Using household spending for schooling as an alternative indicator for
demand-side financing, results of the study pinpoint specific households that should be given high priority for government's assistance programs. Moreover, findings allow policy-makers to evaluate the impacts of financial incentives and social marketing strategies targeted to stimulate more household spending on education.
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Keywords
Education, Household spending, Income ~(feet, Parental valuation effect.