Assessing the Economic Benefits of Higher Education

Abstract

The Philippines produces more than 1.5 million high school graduates and approximately 500,000 students who proceeded and graduated in college every year. The economic benefits of having a degree may attract students to pursue tertiary education. The researcher wanted to determine the economic benefit of higher education. Secondary data from various government agencies were gathered and utilized in this study. A survey to 90 graduates of secondary education and 98 graduates of higher education was done using purposive sampling. The descriptive measures, chi-square test, and the correlation coefficient were employed for the analyses. Enrolling in higher education is quite difficult for some families who can't afford tertiary education which is influenced by three components; the government budget for education, the proportion of income spent for education, and employability. Findings clearly stated that there is a high income when you are a graduate of higher education. The sex, age, and marital status do not have a significant relationship to the earnings of the graduates; however, the bachelors' degree is significantly related. Finally, the researcher concludes that attaining higher education can be seen directly to the increased earnings. The researcher recommends looking into other factors which affect the household income and its relationship to the attainment of tertiary education.

Full text

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Volume 11 • July 2018
ABSTRACT
e Philippines produces more than 1.5 million high school graduates
and approximately 500,000 students who proceeded and graduated in college
every year. e economic benets of having a degree may attract students to
pursue tertiary education. e researcher wanted to determine the economic
benet of higher education. Secondary data from various government agencies
were gathered and utilized in this study. A survey to 90 graduates of secondary
education and 98 graduates of higher education was done using purposive
sampling. e descriptive measures, chi-square test, and the correlation coecient
were employed for the analyses. Enrolling in higher education is quite dicult
for some families who can’t aord tertiary education which is inuenced by three
components; the government budget for education, the proportion of income
spent for education, and employability. Findings clearly stated that there is a high
income when you are a graduate of higher education. e sex, age, and marital
status do not have a signicant relationship to the earnings of the graduates;
however, the bachelors’ degree is signicantly related. Finally, the researcher
concludes that attaining higher education can be seen directly to the increased
earnings. e researcher recommends looking into other factors which aect the
household income and its relationship to the attainment of tertiary education.
Keywords — Economic benets, higher education, descriptive measure,
Leyte, Philippines
Assessing the Economic Benets
of Higher Education
CHRISTIA C. BALTAR
http://orcid.org/
/0000-0002-1608-5905
christiabaltar@gmail.com
Palompon Institute of Technology Tabango Campus
Tabango, Leyte, Philippines
Originality: 99% • Grammarly Score: 93 • Plagiarism:1%
Vol. 11 · July 2018
Print ISSN 2244-1824 · Online ISSN 2244-1816
https://doi.org/10.7719/irj.v11i1.587
JPAIR Institutional Research is produced
by PAIR, an ISO 9001:2008 QMS certied
by AJA Registrars, Inc.

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INTRODUCTION
e economic benets of a college degree are considered to be as extra
earnings one can work for when you have a college degree. Likewise, the higher
level of education one gets, result to a higher earning power (Abel & Deitz,
2014; Greenstone & Looney, 2011). e monetary benets of higher education
thought as lifetime dierence of earning power which include the increased tax
revenues, faster economic growth, greater innovation and labor market exibility,
lower unemployment, and higher productivity (Greenstone & Looney, 2011:
Grove, 2013).
In the Philippines, the economic status of a person is associated with his
educational attainment. Some also say that people who obtain higher education
are more likely to look for a job with higher salary than those who are not a
college graduate. Greenstone and Looney (2011) elucidate that on the average,
the benets of a four-year college degree are equivalent to an investment that
returns 15.2% per year. Besides, the lifestyle of an individual is normally associated
with one’s earning. e Department for Business, Innovation and Skills said that
people who attend tertiary education are more likely to vote, volunteer, have a
higher level of tolerance, and educate their children better than non-graduates
and less likely to commit a crime, smoke and drink heavily.
According to Congressional Budget Oce (2012), the bachelor’s degree
holders are less likely to rely on public assistance program because they were able
to nance their needs unlike those who are not college graduate who are paid
less. Jack Grove (2013) emphasized that the economic benets to society include
increased tax revenues, faster economic growth, greater innovation and labor
market exibility, lower unemployment, and higher productivity. e National
Employers Skills Survey (2007) found out that employers are generally happy
with the quality of young people they recruit or those fresh college graduates.
e survey showed that 81% of employers recruiting graduates thought that they
were well prepared for work compared to 60% of employers recruiting 16-year-
old school leavers and 69% of those recruiting 17 or 18-year-old school leavers.
Some researchers stated that the more earnings a person receive, the better
his lifestyle or standard of living. In the Philippines, many parents cannot
aord to send their children to tertiary education especially in provinces. Many
researches show evidence that people who have higher education tend to have
higher wages. Likewise, the study looked into the economic benets of having
a baccalaureate degree, and it also studied dierent factors which aect their

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motivation in enrolling to college. It further tests whether demographic prole
(sex, age, marital status, degree program) of the respondents was signicantly
correlated with their income.
FRAMEWORK
e conceptual framework of this study (Figure 1) explains that the higher
the level of educational attainment, the higher the earnings. College graduates
earned vastly more than graduates from high school (Graham & Paul, 2010;
Burnsed, 2011). However, attainment of higher education is aected by the
three components: the budgetary allocation of the government to the Philippine
educational system, the rate of unemployment in the Philippines, and the number
of enrollees and graduates of higher education.
e physical facilities and services of the public schools are aected by
the budget allocated by the Philippine government to the educational system.
Although the private schools are not directly aected by these issues, still
many people cannot aord to send their children to private schools. us, the
lesser amount allocated by the government to education reduces the quality of
education.
e unemployment rate in the Philippines is quite high when it compares to
the other ASEAN (Association of South East Asian Nation) countries. According
to Reid (2015), under the administration of President Benigno Aquino, the
unemployment rate has fallen, but the progress has been slow and unstable with
the Philippines still having the highest employment rate in the ASEAN region. As
the implementation of the ASEAN integration approaches, possibilities would be
an increase in unemployment or lessen the rate of employment in the Philippines
because of the agreement made between ASEAN countries.
e budget allocated for education and the rate of unemployment greatly
aect the enrollment rate and the number of graduates in college. If there is a
high school fee in public colleges and universities, then expect a lesser number of
enrollees, also, if it continues to rise and no government subsidy will be given to
the public school, then, it is anticipated to have minimal graduates. Hechinger
(2014) said even with colleges pledging to help low-income students, access to
higher education and nancial help for many disadvantaged students remains
limited and fewer than half of those that do make it to college still fail to earn a
bachelor’s after six years. Completion rates for community colleges in America
are even worse. erefore, an opportunity to have better employment is limited
to undergraduates of higher education.

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Figure 1. Conceptual Framework
OBJECTIVES OF THE STUDY
is study determined the economic benets of having a college degree than
a high school diploma. It also looked into the earnings of high school graduates
and graduate of higher education. Specically, the study determined various
factors which possibly related to the earnings of the graduates. It explored the
dierent components that inuenced the high school graduates to pursue higher
education and indirectly aects their attendance in higher education. Also, it
tested the relationship between the demographic proles (sex, gender, marital
status, degree program) of the respondents to the monetary benet of having a
higher education. It examined whether the prole is correlated with the monetary
benets of being a college graduate.
METHODOLOGY
e study utilized descriptive research design, and it made use of quantitative
data. e purposive sampling was employed to 90 high school graduates and 98
graduate students of higher education. Research procedures started by organizing
the interview guide and the demographic prole to be gathered and used in the

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analysis. Secondary data were gathered from various government agencies in
the Philippines. e data were utilized to describe the identied components
that impede a person not to pursue higher education, and, therefore, cannot
come across the benets of being a graduate of higher education in terms of its
economic benets.
Subsequently, the process used in this study follows the key informant
interview process and document analysis. Descriptive measures were employed for
the descriptive analyses. Further, statistics were chi-square test for independence
used to describe the signicant relationship between the economic status of the
respondents to sex, degree program, and marital status. Spearman correlation was
used to test the relationship between the economic status and age of respondents.
en, this study expects to determine the economic benets of having higher
education.
Figure 2. Research Methodology
e researcher has its denition of the following keywords: economic,
economic benets, higher education, and standard of living. Economic is
something related to the management of income, expenses, money, or wealth.
Economic benets are benets that can be expressed numerically as an amount of
money that will be saved or generated as the result of an action. Higher education
refers to education beyond secondary level or education provided by a college or
universities. It is an institution that awards a bachelor’s degree. e standard of
living refers to the wealth, comfort, material goods, and necessities available to a
certain geographic area.

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RESULTS AND DISCUSSION
e Philippine government allotted P3, 604,497,000 (72, 089 USD)
to higher education which is only 2% of the total budget for the educational
system (Fig. 1). e lion share was given to the basic education because the basic
education can be nished within 10 years of education while the higher education
can be achieved merely within 4 years and technical/vocational education in the
Philippines can be completed in less than a year. A person who cannot pursue
higher education due to lack of nancial capability proceeds to TESDA since
they provide certicates to provide evidence that he has a particular skill for
certain employment.
is only proved that subsidy of the Philippine government to higher
education is not enough to accommodate and serve the fresh graduates of the
secondary level. Parents then nd it dicult to send their children to college
since it is more expensive than high school.
Figure 3. Budgetary Appropriation for Philippine Educational System
by Level of Education and by Agency (in ‘000 pesos) FY 2013
DepEd - Department of Education
CHED - Commission on Higher Education
TESDA - Technical Education Skills and Development Authority
Note: Only selected agencies were covered to represent each level of education.
Source: Department of Budget and Management (2015)

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Volume 11 • July 2018
e children’s education depends on the income of parents. Figure 3 shows
the proportion of income spent by parents on education. e gure illustrates
that as the income of parents gets higher, the percentage it allocates to education
also arise. e gure only shows that nevertheless, those who earn much can
send their children to a better educational institution. With these ndings, it
complements to the catchphrase conventional in the Philippines that says “the
poor become poorer and the rich become richer.” e chance to obtain a higher
degree is reliant on the family income. Parents normally prioritize the expenses
on food which is the basic needs of every family.
Percent of Income Spent on Education
Figure 4. e Proportion of Family Income Spent on Education
(by income class, 2006, in percent), Philippines
Source: Family and Income Expenditure Survey (2006)
Note: the latest FIES of PSA is not currently available as of September 2018
Figure 5. Higher Education Enrollment in Government and Private
Schools in AY2009-2010 toAY2013-2014, Philippines
Source: Commission on Higher Education (2013)

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It only shows that every year, the basic education produces an increasing
number of graduates. e increase in attendance in higher education should be
given importance to avoid a larger number of dropouts.
Figure 6. Number of Graduates by Academic Year:
AY 2008-2009 to AY 2010-2011, Philippines
Source: Commission on Higher Education (2013)
Figure 6 represents the number of graduates produced both by the public
and privates state colleges and universities from AY 2008-2009 to AY 2010-2011
in the Philippines. e data on the recent years were not yet available during
the data gathering of the researcher. Data in Figure 5 show that there was an
increasing number of graduates in the Philippines. is only implies that the
opportunities for employment should also rise so that the newly graduates will
be given a break for employment.
e Philippine government is organizing various job fairs to the provinces to
give opportunities for the newly graduates to be employed. According to Hall and
Moss (1998), the organizations which create opportunities for the employment
for the new business environment have recognized that the career of the future is
a continuous learning process and continuously-learning employees are what the
organization needs to be a continuously-improving business.

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Volume 11 • July 2018
Table 1. Results from the July 2014 Labor Force Survey (LFS)
Philippines July 20141/
(Excludes Leyte)
July 20132/
(Excludes Leyte)
July 2013
(Includes Leyte)
Population 15 years and over
(in 000) 64,070 63,180 64,470
Labor Force Participation
Rate (%) 64.4 63.9 63.9
Employment Rate (%) 93.3 92.7 92.7
Unemployment Rate (%) 6.7 7.3 7.3
Underemployment Rate (%) 18.3 19.2 19.2
Source: Philippine Statistics Authority
1/Estimates for July 2014 are preliminary and may change.
e province of Leyte was not covered in the July 2014 LFS.
2/July 2013 estimates are based on data which excludes Leyte to make the July 2013 estimates
comparable with July 2014 estimates.
Table 1 represents the employment and unemployment rate of the population
15 years and above. is means high school and college graduates were part of the
survey. e data excludes the province of Leyte because of the super typhoon hit
to the area on November 8, 2013. To give a comparison with the previous year,
a computation excluding the province of Leyte was also done. Data in the table
shows that, excluding Leyte, there was an increase in the rate of employment and
a decrease in the unemployment rate. ese only impart that despite the disaster
took place in the Philippines still the government able to decrease its employment
rate. Hence, it is evident that there was an increase of unemployment rate in the
province of Leyte after the disaster. However, right now the province is recovering
from the destruction brought by the super typhoon. Many opportunities were
given to the victims and even small and medium enterprises already recovered
from their loss. Lazear (1990) said that employees are required to pay workers
on separation or to give advance notice of termination and incumbents are more
likely to retain their jobs, but new workers are less likely to be hired.
Table 2. Summary of Earnings both Graduates of High School and College,
Philippines
Level of Education Monthly Wage (in pesos)
High School
College
All sample
8, 450.32
14, 512.24
Source: Author’s calculation

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Table 2 presents the earnings of workers both high school graduates and
those of college graduates. e ndings were based on the calculation of the
author in her research study. Evidence shows that college graduates earned much
than high school graduates. About Php 6,000.00 (about 150 USD) was the
dierence in their income. e result is comparable with the ndings of De Vera
and Tan (2010) using their model which showed that college graduates’ earnings
are higher than those with a high school diploma alone.
Table 3. Relationship on the Prole of the Respondents to the Monetary Benets
of Higher Education
Prole Statistics Computed Value p-value Interpretation
Degree Program Chi-square Test 109.904 0.000** Signicant
** - signicant at 0.01 level of signicance
* - signicant at 0.05 level of signicance
Source: Author’s calculation
e result in table 3 shows that there is no signicant relationship on the
prole (sex, age, and marital status) of the respondents to the economic benets
of higher education. is explains that the income of the graduates is not related
to whether the person is younger, married or male. However, results show that
there is a signicant relationship between the degree program and the income of
the graduates. e course or degree program aects the income of the graduates,
and in fact, most of the graduates who earned much were graduates of a certain
course. us, one should be careful in choosing the degree they wanted to enroll
since it has an impact on the resulting economic benets of being a college
graduate. According to Diener, Sandvik, Seidlitz, and Diener (1993), the African-
Americans and the poorly educated did not derive greater happiness from specic
levels of income.
CONCLUSIONS
e graduates of basic education do not equate to enrollees in tertiary
education because many parents especially uneducated parents who have less
income cannot aord to send their children to tertiary education. Parents would
have always thought that for as long as their children know how to read and
write, they would not be ignorant anymore. However, this study has shown that
college graduates tend to have higher earnings than high school graduates.

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Volume 11 • July 2018
In the Philippines, before the implementation of the K12 program, according
to the Philippine Salary Guide, the occupations which have higher income are
those with diploma or degree or those who have attained post graduate program
which imply that high school graduates do not belong to top earners. ese
ndings are also supported with the article of Cliord (2012) where the top 10
high paying jobs are those graduates of Bachelor’s degree. Although, there were
jobs belong to the top 10 high paying jobs which do not require a bachelor’s
degree, but completion of college-level education is a denite advantage coupled
with years of experience. Orbeta (2003) highlighted that more professionals or
any managerial or executive positions are held by graduates of tertiary education,
i.e. graduates in UP, Ateneo, and de La Salle. Finally, the bachelor’s degree
program signicantly aects the earnings of the graduate respondents.
e factors that inuence students’ decision to enroll in college are the cost,
the availability of nancial aid (Noel-Levitz, 2012), orphan-hood, transport to
higher education institution, and unplanned pregnancies (Matsolo, Susuman, &
Ningpuanyeh, 2016).
TRANSLATIONAL RESEARCH
e ndings of the study describe the Philippine Educational System prior
to the implementation of the Republic Act No. 10931 (e Free Tuition Law)
where the basic education is only ten years. It is best to have further study
in the existing program where the basic education is already 12 years like in
other countries. Further, the new curriculum of the basic education (the spiral
progression approach) may also aect the skills of the high school graduates
compared to the old curriculum of the basic education.
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