Small and medium enterprise employment in the Philippines: a sectoral and regional analysis
Date
2008-03
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
The Small and Medium Enterprise (SME) sector is a promising and unexploited channel for labor absorption and poverty reduction in the country. This paper examines the factors affecting SME employment, more specifically, the contribution of macroeconomic indicators and policies to SME employment. It analyzes variations in SME employment across regions and sectors to explore policy interventions that could lead to higher employment creation per region and per sector. It also provides a comprehensive background that includes a discussion on Philippine SMEs and the link between SME employment and poverty reduction.
Regression analyses reveal that there are notable differences on the effects of SME employment determinants on SME employment in sectors and regions, indicating that selected policies must be aimed at either regions or sectors to reach optimal SME employment growth. GOP and tax policies must be geared to SMEs across sectors, while policies on wages and loans have more favorable employment effects across regions. Finally, increases in the number of establishments must be well-distributed across regions and sectors in order to equally stimulate SME employment growth and successfully contribute to poverty reduction.
Description
Keywords
SME, Small and medium enterprise, Employment, SME employment, Labor market, Labor force, Labor relation, Regional analysis