The Determinants of the Underemployment Gender Gap in the Philippines: A Decomposition Analysis

• Main Authors: Arbole, John Ichiro, de la Paz, Luisa Martina Gaston, Genota, Therese, Hernandez, Katrina, Dacuycuy, Lawrence B., Rapada, Maria Zunally, Yu, Krista Danielle
• Format: text
• Published: Animo Repository 2023
• Subjects: Philippines; employment; labor market issues; Labor Economics; Public Economics
• Online Access: https://animorepository.dlsu.edu.ph/res_aki/179; https://animorepository.dlsu.edu.ph/context/res_aki/article/1186/viewcontent/DLSU_AKI_Policy_Brief__2023_12_021.pdf
• Institution: De La Salle University

Underemployment is a prevalent labor market issue around the globe. It reflects how an individual can be employed but is unable to work to their desired number of hours, receive sufficient wages, or fully utilize their skills, leaving them in precarious working conditions. Studies on underemployment and its gendered impact in the Philippines remains limited with most labor studies primarily addressing wage and unemployment. This study addresses this gap by identifying the factors contributing to underemployment and gender-based inequalities in the Philippines. Using quarterly data from the Labor Force Survey from 2012 to 2021, we distinguished between visible and invisible underemployment based on the number of hours worked per week. To analyze the determinants of these two forms of underemployment, we employed a probit model with Heckman’s two-step sample correction that considers workers' individual, organizational, and social characteristics. We then executed an Oaxaca-Blinder decomposition to estimate the visible and invisible underemployment gender gap and its component. We found that men have a higher probability of visible and invisible underemployment compared to women primarily because of endowments in education and occupational choice, although there is evidence men are rewarded more in the labor market than women. One policy recommendation is to improve upskilling, reskilling, and education programs for workers, especially for highly vulnerable demographics such as less-educated rural male workers.