Class of worker responsiveness to GDP
Date
2008-11-18
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Abstract
This paper sought to examine the responsiveness of each class of worker, namely wage and salary earners, own account earners and unpaid family workers, to GDP growth. It attempts to explain the lack of apparent correlation between GDP growth rate and employment growth rate in the Philippine setting. It also sought to determine which class of worker best tracks GDP growth. A background on the employment and GDP over a period of 15 years (1993-2007) was provided to narrate actual events, which led to the increase or decrease of employment and GDP. A correlation and significance testing of each class of worker's growth rate to GDP growth rate were also conducted to provide statistical evidence of their relationship. Results showed that wage and salary earners are more positively correlated and statistically significant to GOP growth. The movement and growth of wage and salary workers deemed to best track GDP growth. On the other hand, both own account earners and unpaid family workers have a negative correlation to GDP growth. However, unpaid family workers are the least significant among the three major classes of workers. An interesting finding in our study is such that removing the variability caused by the unpaid family workers, employment without unpaid family workers showed a more significant and positively correlated relationship with GDP growth than employment with unpaid family workers. On a broader point of view, our findings suggest that as the Philippines progresses in terms of higher GDP growth implies more participation to become wage and salary earners.
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Wage inequality, Wage, GDP, Labor market, Labor force, Filipino workers