Education and Gross Domestic Product of the Philippines

Education and Gross domestic intersection point of the PhilippinesMari unitary Tomas T. PadillaABSTRACTThe research paper is about determining whether authoritative factors of Education have an effect on the overall Gross Domestic produce of the Philippines. Intuition would tell us that Education has an effect on GDP. In addition, cipher allocations for command in the Philippines be high compared to the other sectors in the government.Table of ContentsIntroductionBackground of the Study . 4Statement of the line of work . 5Objectives of the Study . 6Significance of the Study . 6Scope and Limitation . 7Review of Related LiteratureCivilian discretionary outgo 8Human smashing and Education 9Education in the PhilippinesMillennium Development GoalsSimilar StudiesTheoretical FrameworkGross Domestic ProductIS-LM Model functional FrameworkVariable ListA-Priori ExpectationsMethodologyEmpirical Testing and Analysis of ResultsConclusion and RecommendationsReferencesIntroductionBackg round of the Study consort to Jeffrey Sachs (2011), civil discretionary spending is spending on public goods and services that the private economy cannot provide on its own1. In addition, angiotensin converting enzyme of the sectors he mentioned that are gnarled in civil discretionary spending is knowledge. Education is defined as the knowledge and development resulting from an educational process (Merriam Webster, 2014)2. In any country, education is one of the things that the government is in charge of and is one of the factors in the governments expenditures which contributes to a percentageage in a countrys Gross Domestic Product (GDP) the government takes into consideration the budget allocation for education, how they are going to light upon the educational sector competitive i.e. the calibre of the service that the citizens of the country are to get, and many other factors.The Philippines currently has a literacy rate of 95.4% and rank 108th out of 215 countries in ter ms of literacy rate3. In addition, the educational system of the Philippines is currently experiencing a shift, because our educational system is being exposed to different factors such as the implementation of the K to 12 and the ASEAN Integration which are to be imposed soon. In the preceding education system of the Philippines, kindergarten was not compulsory for students but now it is. In addition, Primary Education (Elementary) and Secondary Education (Junior and Senior High School) both postulate 6 years making a total of 12 years. Because of these adjustments and other factors, the budget and the expenditure for education increase every year. The Department of Education is one of the top departments that are granted high budget allocations with their proposed 2014 budget being the highest at 293.3 billion pesos according to an article in Rappler (2013), the increase is focused on learning resources, as well as classrooms, chairs and school facilities4. But despite all of t his, the overall quality in the education has gloamd and this was due to certain factors (insert them here). With this given, this proves to be a challenge not just for the government but for the other Filipinos as well that could not cope up with the Philippines current system of education. According to population Vision (2011)5, education has a relationship with growth of an economy i.e. lack of quality education is a threat to economic growth. In addition, humanity Vision overly stated that 92 percent of Filipino children are able to enroll in primary education but 20 percent of these students who enrolled are able to finish.Statement of the ProblemThe Philippines experienced a decline in the quality of education due to certain factors such as the quality of the education, affordability, budget, and mismatch between cooking and the jobs6. With this, the researcher has prepared the following questionsa) How can the Philippine government fix or alleviate these factors?b) Were there any measures taken in line with the previous question? What specific measures were done and were they effective?c) Are Filipino students (both current and incoming) ready for K to 12 given the decline in the quality prior to the implementation?d) Is K to 12 really a footstep further for the Philippines?The researcher would also want to know if the budget that has been allocated to them is being used efficiently and in the end if it contributed to the output of the country. In addition, the researcher would also want to clarify if these expenditures in education really did make any changes.Objectives of the StudyGiven the background of the topic for this research, the researcher would like to accomplish the following objectivesa) Determine the relationship between certain factors of education i.e. come in of enrolled students and education expenditure, and the Gross Domestic Product of the Philippinesb) Be able to find ways to improve the quality of the educational system o f the Philippines so that we can be really ready for future changes.c) Construct an econometric model that can be used in analyzing how GDP and Education go hand in hand.Significance of the StudyA lack of quality education can hamper growth in the economy because the citizens are not equipped with the basic knowledge in addition, a lot of Filipinos do not have access to even the basic education and because of this, the human condition is not improving. In the Human Development Forum held last March 2, 2011, U.S Secretary of Education Arne Duncan stated that Education can be the bridge to factors such as eliminating sexual urge inequality, poverty reduction, planet sustainability, preventing deaths and illnesses, and for peace.In addition, he stated that education is inseparable from the development of human capital, and that education is the new currency so that kingdoms maintain economic competitiveness and global prosperity (Duncan, 2011)7.In line with the previous statement, t his study is aiming to find a way to be able to improve the standard of education that the Philippines has and to make it competitive. In addition, this study aims to make a point that education plays a role in the growth of a country and is a step towards improving lives thus we should not take this lightly. The researcher believes that the government should look into the bigger picture and the root causes as to why our education is not approachable or feasible to the citizens.Scope and LimitationThe data used in this study came from sources such as indexmundi, World Bank, NSCB, and UNData. The researcher took into consideration GDP, Education usance (not including capital and equipment), and number of enrolled students per year level except the Tertiary Level due to unavailability of data the research has 30 observations (from 1982 to 2011) and is focused on a Philippine setting. The researcher is using the multiple regression analysis to determine the influence of our independen t variables to the dependent variable.Review of Related LiteratureCivilian Discretionary SpendingThe Huffington Post (2011), posted an article entitled De-Mystifying the Budget Debate this article was written by Jeffrey Sachs. One of the things that Jeffrey Sachs pointed out was the issue on civilian discretionary spending. Civilian discretionary spending is spending on public goods and services that cannot be provided efficiently by the private economy alone (Sachs, 2011). In addition, the programs are called discretionary because the budget allocation is voted upon every year and contributes to about 4% of the GDP in the United States. He also mentioned the factors that make up civilian discretionary spending in the following quote8Discretionary spending includes national security (homeland security, diplomacy, development assistance) education and job training science and engine room the justice system public administration environmental protection community development and hous ing assistance major infrastructure (highways, dams, levees, flood control, water and sanitation).From the given definitions and statements, the aim of civilian discretionary spending is to make a country competitive and so that there would be more opportunities for economic growth.Human neat and EducationAccording to Investopedia, Human Capital is defined as a measure of the economic value of an employees skill set wherein it measures the labor input and is public opinion to be equal9. The term was coined by economist Theodore Schultz this term mirrored human capacities and believed that human capital was like any other capital in general. Capital is defined as those long term assets used in the production of output by a firm. In the case of human capital, education, training and raise benefits are the factors to be considered when investing in human capital in effect this will lead to an improvement in the quality and level of production. In addition, the education and the expe rience an employee has obtained merits economic value in the perspective of both employers and the aggregate economy.The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) published a study in 2001 entitled Development Planning in a Market Economy One segment of this study, The Role of Human Capital in Economic Development Some Myths and Realities, explains how important Human Capital is in Economic Development10. The author stated that for human capital to create an impact on economic development, a nation needed to have at least a 70% literate population. In addition, it was also stated that if a full-size number of people in the population are literate, even if they are equipped with the basic education, the minds of the masses can be opened up (UNESCAP, 2001). It was also mentioned that the government has a role in this i.e. one of the factors as to why there are differences in human capital was because of the direction of the priorities and commit ments of a nation towards the educations sector11 (UNESCAP, 2001).An entry in the Encyclopedia of Educational Philosophy and Theory (EEPAT), entitled Human Capital Theory and Education, one concept introduced is the Human Capital speculation wherein it states that the framework for nation state policy framework is by enhancing the flexibility of labor in the labor market, and also enhancing skills through investment in education, training and employment schemes, and immigration focused on attracting high-quality human capital (Fitzimons , 1999)12. In that same entry, Fitzimons (1999) referenced Adam Smiths The Wealth of Nations (1776) wherein Adam smith was able to formulate a basis for the science of human capital. In addition, two schools of thought were formed the first school of thought distinguished acquired capacities that were categorize as either capital or the human being themselves, who were not counted as capital. The second school of thought, on the other hand, claime d that human beings are considered capital.Operational FrameworkVariable ListThe table below presents the variables that have been used in the study. The model has four independent variables and one dependent variable. The regression to be performed will take into account the significance of the variables, both individual and overallReferenceseducation. 2014. In Merriam-Webster.com.Retrieved April 5, 2014, from http//www.merriam-webster.com/dictionary/educationSachs, J. (2011, April 18). De-Mystifying the Budget Debate. The Huffington Post.Retrieved April 5, 2014, from http//www.huffingtonpost.com/jeffrey-sachs/de-mystifying-the-budget_b_850332.htmlGeronimo, J. (2013, July 30). DepEds proposed 2014 budget biggest in history. Rappler. Retrieved April 5, 2014, from http//www.rappler.com/nation/35186-deped-proposed-budget-biggest-in-historyPhilippines. (n.d.). World Vision. Retrieved April 5, 2014, from http//www.worldvision.org/our-impact/country-profiles/philippinesPhilippines. (n.d. ). Find the Data. Retrieved April 5, 2014, from http//country-facts.findthedata.org/l/111/PhilippinesMankiw, G. (2013). The Data of Macroeconomics. Macroeconomics (8th Edition ed., p. 18). New York Charles Linsmeier.Human Capital. (n.d.). Investopedia. Retrieved April 5, 2014, from http//www.investopedia.com/terms/h/humancapital.aspGary S. Becker. Human Capital.The Concise Encyclopedia of Economics.2008. Library of Economics and Liberty. Retrieved April 5, 2014 from the World extensive Web http//www.econlib.org/library/Enc/HumanCapital.htmlPatrick Fitzsimons. (1999). Human capital theory and education. InThe Encyclopaedia of Educational Philosophy and Theory, M. Peters, T. Besley, A. Gibbons, B. arni, P. Ghiraldelli (eds.). Retrieved 5 April, 2014 fromhttp//eepat.net/doku.php?id=human_capital_theory_and_educationAn Analysis on the Education and Gross Domestic Product of the Philippines 11 Civilian Discretionary Spending will be elaborated in the Review of Related Literature.2 Defin ition of education taken from http//www.merriam-webster.com/dictionary/education3 Statistics taken from http//country-facts.findthedata.org/l/111/Philippines4 The full article can be seen at http//www.rappler.com/nation/35186-deped-proposed-budget-biggest-in-history5 Taken from http//www.worldvision.org/our-impact/country-profiles/philippines6 Retrieved from http//www.ph.net/htdocs/education/issue.htm7 The Full transcript can be viewed at http//web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTEDUCATION/0,,contentMDK22848251menuPK282425pagePK64020865piPK149114theSitePK282386,00.html8 This section explains the factors that make up civilian discretionary spending note that this is an excerpt from the article mentioned. The article can be found at http//www.huffingtonpost.com/jeffrey-sachs/de-mystifying-the-budget_b_850332.html9 Definition taken from http//www.investopedia.com/terms/h/humancapital.asp10 The file for the said part can be found at http//www.worldwewant2015.org/node/29625311 Th is quotation can be seen on the same file mentioned. Refer to footnote number 10.12 Retrieved from http//eepat.net/doku.php?id=human_capital_theory_and_education