Mind the gap: Assessing worker-level labor productivity in the Philippine labor force

• Main Authors: Cabrera, Kristin Joelle S., Leyva, Arielle V., Lu, Jayby B., Yap, Patricia Claire K.
• Format: text
• Language: English
• Published: Animo Repository 2021
• Subjects: Labor productivity > Philippines; Wages and labor productivity > Philippines; Labor productivity—Sex differences > Philippines; Labor Economics
• Online Access: https://animorepository.dlsu.edu.ph/etdb_econ/24; https://animorepository.dlsu.edu.ph/cgi/viewcontent.cgi?article=1029&context=etdb_econ
• Institution: De La Salle University

Existing measures on labor productivity assume homogeneity in labor input as a factor of production. The labor pool as opposed to homogeneous inputs consists of widely disparate individuals who produce different levels of output with their own distinct set of qualities. With this, we analyze the disparities in average real wages of worker categories and formulate a micro-level labor productivity index using a transformed Tornqvist index that estimates the role of heterogeneous worker characteristics in determining labor productivity. We also investigate the marginal effects of the component terms to wages. We find gaps in productivity among factors of sex, industry, age group, and region of location where, notably, results posit (1) females as having higher average labor productivity indices and real wage across multiple categories; (2) the presence of a gender pay gap across industries; (3) wide disparity between regions in favor of the National Capital Region; (4) decreasing labor productivity gaps between the younger and older age groups; and (5), an increase in average real wage and labor productivity indices over the years except for college graduates. These findings confirm the need to discern the effects of human factors on personal labor productivity, especially when implementing policies that aim to strengthen the labor force.