Green Revolution, development of labor markets, and poverty reduction in the rural Philippines, 1985-2004

Using a long-term household panel data set collected in three rural villages in the Philippines in 1985 and 2004, this article explores how the Green Revolution and development of the labor markets have affected household income and poverty situation. The initial rise in income associated with the Green Revolution and a stronger credit access has enabled the households to allocate funds for investing in children's schooling. With the increased integration of the rural with the urban labor market, these children are able to explore labor opportunities in the nonfarm sector that resulted in a decline in poverty by about one-half. The landless households, who are less educated, benefited, too, from the expansion of the nonfarm labor market, because of the rise in rural wages associated with the rise in demand for the unskilled labor, which is by far their most important asset.