Made for Export: Labor Migration, State Power, and Higher Education in a Developing Philippine Economy by Neil G. Ruiz M.Sc. Economic and Social History University of Oxford, 2001 B.S. Political Science University of California at Berkeley, 1999 SUBMITTED TO THE DEPARTMENT OF POLITICAL SCIENCE IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY IN POLITICAL SCIENCE AT THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY JUNE 2014 ©2014 Neil G. Ruiz. All rights reserved. The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or in part in any medium now known or hereafter created. Signature of Author: ____________________________________________________________ Department of Political Science May 22, 2014 Certified by: ___________________________________________________________________ Michael J. Piore David W. Skinner Professor of Political Economy (Emeritus) Thesis Supervisor Accepted by: __________________________________________________________________ Roger Petersen Arthur and Ruth Sloan Professor of Political Science Chair, Graduate Program Committee 2 Made for Export: Labor Migration, State Power and Higher Education in a Developing Philippine Economy by Neil G. Ruiz Submitted to the Department of Political Science On May 22, 2014 in partial fulfillment of the Requirements for the degree of Doctor of Philosophy in Political Science Abstract Development scholars, heavily influenced by the cases of the four Asian Tigers (Hong Kong, Singapore, South Korea, and Taiwan), have attributed success in economic development to education. Although the Philippines seemed even more promising before the Asian Tigers began developing, the educational advances in the Philippines have led to an enormous exodus of labor. Failing to integrate its highly educated labor force in the domestic economy, the Philippine state focused its attention on exporting college-educated/highly-educated workers by creating a set of elaborate institutions to facilitate overseas employment. As a result, currently over 10 percent of its citizens live abroad in over 160 countries and about 4,600 Filipinos leave the country every day for overseas work. Why did the Philippine government develop institutions for exporting labor and why has it continued for the past four decades? This dissertation explains how the management of post-secondary educational institutions influenced the initiation and continuation of the Philippine labor export program. From its start, two interrelated problems motivated the creation of the Philippine labor exporting state: (1) overdevelopment of the educational system through an unregulated, laissez-faire approach to private higher education and (2) underdevelopment of the economy to absorb high-skilled labor in the domestic labor market. President Ferdinand Marcos and his technocrats developed the 1974 labor export program to relieve the country of these twin problems by providing overseas employment for the educated unemployed and generating foreign currency revenues from the remittances received from Filipinos working abroad. Over time, political pressures from overseas Filipinos and migrant households, coupled with growing remittance revenue and a large private recruitment industry, led to further development of the labor exporting state with the creation of new state emigrant institutions for managing, protecting, and representing Overseas Filipino Workers (OFWs). These new state institutions, overseas demand for Filipino workers, domestic demand for remittances, and a highly flexible and unregulated private higher educational system continues to drive the exporting of Filipino labor to this day. Empirically, this dissertation is based on twelve months of fieldwork in the Philippines and relies on multiple research methods: archival research, statistical methods empirically testing the relationship between post-secondary education and out-migration, over one hundred interviews of key actors in the labor export and higher education industries, quantitative data analysis using survey and census data from the 1950s through 2011, the creation and analysis of an original dataset of family ownership of all private higher educational institutions in the Philippines, and a review of government documents and legislation. Thesis Supervisor: Michael J. Piore Title: David W. Skinner Professor of Political Economy (Emeritus) 3 4 Table of Contents List of Tables 7 List of Figures 9 Acknowledgments 11 Chapter 1. Introduction 13 Chapter 2. Weak State and the Twin Problems of Development Failure 49 Chapter 3. Strong State and the Labor Export Program 105 Chapter 4. Entrenchment of the Labor Export Industry 139 Chapter 5. Education for Labor Export 191 Chapter 6. Conclusion 233 Appendices 249 Bibliography 251 5 6 List of Tables Table 1.1 School Enrollment Ratios in Selected Countries, 1960 Table 1.2 Emigrant Institutions of Selected Countries Table 2.1 Public Education Annual Enrollment by School Levels for Selected Years Table 2.2 Enrollment in Public and Private Schools by Level, 1946-47 to 1955-56 Table 2.3 Literacy of Population 15 years and above, 1960-2000 Table 2.4 Illiteracy Rates by Age Groups as percentage, 1970 and 1980 Table 2.5 Public School Enrollment as percentage of total enrollment, 1903-1941 Table 2.6 Share of Private Higher Education (% Total), 1955-1975 Table 2.7 Participation Rates by Level of Education for Corresponding Age Groups, 1960 to 1970 school years Table 2.8 Private and Social Rates of Return to Levels of Schooling, 1971 Table 2.9 Percent Distributions of Higher Education Graduates by field, 1951-1952 to 1990- 1991 Table 2.10 Comparison of Number Needed and Graduates in Specialization, 1967-68 Table 2.11 Fields of Study with Highest Enrollment, 1968-1970 Table 2.12 Number of Collegiate Graduates by Major Fields of Study, in Public and Private Schools, 1968-1969 Table 2.13 Cost of Education at Various Educational Levels in the Philippines, 1965 Table 2.14 Number of Collegiate Graduates by Sex in Public and Private Schools, 1968-1969 Table 2.15 Average annual growth rates of domestic product (1972 prices) by industrial origin, 1949-1977 (in percentages) Table 2.16 Philippine External Debt, 1965-1970 (in millions) Table 2.17 Agriculture’s Share in Total Imports and Exports, Ratio of Agricultural Imports to Exports, 1960-2000 (as percentage) Table 2.18 Growth of Manila and its Suburbs, 1903-1960 Table 2.19 In-Migration, Out-Migration, Net Migration Rates, 1960-1970 (per thousand) Table 2.20 Employed Persons by Major Industry Group, 1956-2000 Table 2.21 Employed Persons by Major Occupation Group, 1956-2000 Table 2.22 Unemployment Rates by Educational Attainment, May 1961, October 1965, and May 1968 Table 2.23 Tertiary School Enrollment by public versus private institutions, 1903-1985 Table 3.1 Public Sector Expenditure, Revenue, and Investment (as percentage of GDP) Table 3.2 Growth in Number of Vocational Schools by Training Programs, 1940-1970 Table 3.3 Licensure Examination Passage Rates by Discipline, 1994-1998 Table 3.4 Chemistry Licensure Examination Passage Rates by Type of HEI, 1975-2004 Table 3.5 Dentistry Licensure Examination Passage Rates by Type of HEI, 1975-2004 Table 3.6 Medicine Licensure Examination Passage Rates by Type of HEI, 1975-2004 Table 3.7 Accounting Licensure Examination Passage Rates by Type of HEI, 1975-2004 Table 3.8 Nursing Licensure Examination Passage Rates by Type of HEI, 1975-2004 Table 3.9 Asian Immigrants Admitted into the United States, 1960-1982 Table 3.10 Total Number of Filipinos Admitted into the US (by Occupation), 1947-1979 Table 3.11 Filipino Immigrants Admitted into the United States by Age and Sex, 1988 Table 3.12 Placement of Overseas Filipino Contract Workers, 1969-1976 Table 4.1 Processed Land-Based OFWs by Major Destination, 1975-2005 7 Table 4.2 OFWs by Level of Education and Type of Work (in percentage), 1993-2002 Table 4.3 Top 5 Occupations among OFWs with bachelor’s degree or above, 1993 and 2002 Table 4.4 Gender Distribution by Level of Education of OFWs (in percentage), 1983 Table 4.5 Gender Distribution by Overseas Occupation (in percentage), 1993-2002 Table 4.6 Top Destinations among those Working Abroad as Professional Nurses, 2002 Table 4.7 Remittances of Overseas Filipino Workers, 1975-2006 Table 4.8 Annual Gross Returns to Migration for Selected Occupations for New Hires, Foreign versus Domestic Wages (in US dollars), 2002 Table 4.9 Country of Employment by Overseas Jobs Satisfaction (in percentage), 1982 Table 4.10 Top 5 Occupations for OFWs in “Personal Care and Related Workers” Occupations Abroad before Migrating, 2002 Table 4.11 Number of OWWA Welfare Cases, January to September 2004 Table 4.12 Recruitment and Placement by Recruitment Intermediary, 1986 Table 4.13 Estimates of Placement Expenses, 1980-1987 (in Philippine Pesos) Table 4.14 Philippine Remittance Industry Revenue Estimate, 2004 Table 5.1 Comparison between the Management of Post-Secondary Education and Number of Overseas Filipino Workers (OFWs) Table 5.2 Top Destinations among those Working Abroad as Domestic Helpers, 2002 Table 5.3 Descriptive Statistics Table 5.4 Impact of %∆ Tertiary Education Enrollment on the %∆ Number of OFWs, 1989- 2004 Table 5.5 Impact of %∆ Tertiary Graduates on the %∆ Number of OFWs, 1996-2003 Table 5.6 Percent Change in Philippine Tertiary Enrollment and Tertiary Graduates between 1996 and 2004 Table 5.7 Seemingly Unrelated Regression Estimates: Impact