An analysis of the trends and determinants of Philippine household income volatility
Date
2013-04
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
This paper aims to investigate the trends and determinants of household income volatility in the Philippines, incorporating the study of Dynan, Elmendorf and Sichel (2012). Using the Famil Income Expenditure Survey (FIES) as the primary source of data, this research paper computes for income volatility using the dispersion of year-to-year income changes for the years 2000, 2003, 2006 and 2009. The construction of pseudo-panel data for age cohorts is also applied, following the work of Mapa and Bersales (2008). Synthetic cohort analysis allows us to perform a regression analysis to estimate the effects of explanatory variables such as household head gender, marital status, occupational status, detailed groupings of income sources, educational attainment. region and age on income volatility. We find that income volatility is greatly affected by the household head's age, which posts significant results for all years included. In addition, educational attainment and occupational status are major factors that contribute to volatility of income of the household heads. We conclude that the trends within the last 3 FIES are almost similar, exposing the elderly to greater risk of having volatile incomes relative to those who are still in the labor force.