Caught in a Debt Trap? An Analysis of the Financial Well-being of Teachers in the Philippines
Main Article Content
Keywords
debt-trap, financial well-being, informal borrowing, public school teachers, education
Abstract
Since the Teacher Advancement for Optimum Well-being or the Project TAO Survey conducted in 2000 by the Philippine Senate, which made a comprehensive study on the well-being of public school teachers in the country, there's has been a dearth of researches that provide empirical data on the current status of the financial well-being of the public school teachers in the country that can inform public policy on the matter. Specifically, this research seeks to investigate the phenomenon that many public school teachers in the country are caught in a “debt trap.” A survey was conducted in two regions, utilizing an adopted version of the instrument used by the Financial Industry Regulatory Authority (FINRA) Investors Education Foundation in the 2012 National Financial Capability Study (NFSC) in the United State and a fourstages stratified cluster sampling determined the 710 public school teachers-participants in the of which 239 are elementary school teachers and 471 are high school teachers. Descriptive statistics such as frequencies and percentages were computed to examine the respondents' household condition and income; their perception on their debt situation and the factors that made them vulnerable to onerous debt and usurious lending. Results revealed that the financial well-being of public school teachers is serious, characterized by burgeoning debt problem and low net income. Contributing to these problems included impaired capability of the spouses of the teachers to earn income for the family, low level of housing ownership and significant housing debt, insufficient skills in managing money and financial planning, and the high incidence of informal credit utilization. Several policies and programs of the government pertaining to teacher's welfare were suggested to be reviewed specifically the effectiveness of Republic Act. 4676, the “Magna Carta for Public School Teachers” in addressing the current financial challenges of the public school teachers.
References
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Oksanen, A., Aaltonen, M. & Rantala, K. (2015). Social determinants of debt problems in a Nordic Welfare State: a Finnish register-based study. Journal of Consumer Policy. Retrieved from https://www.researchgate.net.
Stango, V. & Zinman J. (2007). “Fuzzy math and red ink: When the opportunity cost of consumption is not what it seems,” Working Paper, Dartmouth College.
Statistics on Filipino Women and Men's Education. (2014, April 13). Retrieved from http://www.pcw.gov.ph/statistics/201405/statistics-filipino-women-andmens-education.
The Philippine Star. (2014, Sept. 2). 3 dead in Pangasinan school shooting. Retrieved from http://www.philstar.com/headlines/2014/09/02/1364502/3-deadpangasinan-school-shooting.
Van Praag, B. M. S., Frijters, P., & Ferrer-i-Carbonel, A. (2003). The anatomy of subjective well-being. Journal of Economic Behavior and Organisation, 51, 29-49. Retrieved from DOI: 10.1016/S0167-2681(02)00140-3.
Webley, P., & Nyhus, E. K. (2001). Life-cycle and dispositional routes into problem debt. British Journal of Psychology, 92, 423-446.
World Bank (2015). Enhancing Financial Capability and Inclusion in the Philippines – A Demand-side Assessment. Retrieved from http://responsiblefinance.worldbank.org/~/media/GIAWB/FL/Documents/
Publications/Enhancing-Financial-Capability-and-Inclusion-in-the-Philippines-FINAL.pdf.
Armas, J. C. A. (2015). Household credit in the Philippines: Developments, cross-country comparison and implications to financial stability. Retrieved from https://www.dosm.gov.my/v1/uploads/files/4_Portal%20Content/2_%20Statistics/MyStats/2016/abstract/08__Abstract_JeanArmas.pdf.
Collard, S., Finney, A., & Davies, S. (2012). Working households' experiences of debt problems: A research report prepared for step change debt charity. Foundation for Credit Counselling. Retrieved from https://pdfs.semanticscholar.org/3aa4/3ab-
36b572090a0b96b79748c8d6972f6c10.pdf.
European Foundation for the Improvement of Living and Working Conditions (2013). Household over-indebtedness in the EU. The role of informal debts. Luxembourg: Publications Office of the European Union. Retrieve from http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1316&context=intl.
Forbes, (2009). Bill Gates: It's the teacher stupid. Retrieved from https://www.forbes.com/2009/01/26/bill-gatesletter-tech-enter-cz_vb_0126billgates.html.
Fryer, Jr. R. (2011). Teacher incentives and student achievement: Evidence from New York City public schools. Retrieved from http://scholar.harvard.edu/files/fryer/files/teacher_incentives_and_student_achievement_evidence_from_new_york_city_public_schools.pdf.
Gathergood, J. (2012). Debt and Depression: Causal Links and Social Norm Effects. The Economic Journal, 122: 1094–1114. doi:10.1111/j.1468-0297.2012.02519.x.
Godfrey, N. (2006). Making our students smart about money. Education Digest, 71(7), 21- 26.
Hanushek, A. & Rivkin, S. (2007). Pay, working conditions, and teacher quality, ERIC, 17(1), 69-86. Retrieved from http://files.eric.ed.gov/fulltext
/EJ795875.pdf.
Hayhoe, C., Leach, l., Turner, P., Bruin, M., & Lawrence, F. (2000). Difference in spending Habits and credit card use of college students. Journal of Consumer Affairs, 34, 113-133. Retrieved from DOI: 10.1111/j.1745-6606.2000.tb00087.x.
Joo, S. (1998). Personal financial wellness and worker productivity. (Unpublished Doctoral Dissertation), Virginia Polytechnic Institute and State University, Blacksburg, VA.
Joo, S.(2008). Personal financial wellness. In J. J. Xiao (Ed.), Handbook of consumer research (pp. 21–33). New York: Springer. doi:10.1007/978-0-387-75734-6_2.
Joo, S., & Grable, J. (2004). An exploratory framework of the determinants of financial satisfaction. Journal of Family and Economic Issues, 25(1), 25-50.
Keese, M.(2012). Who feels constrained by high debt burdens? Subjective vs. objective measures of household debt. Journal of Economic Psychology, 33, 125–141.
Kidwell, B., & Turrisi, R. (2004). An examination of college student money management tendencies. Journal of Economic Psychology, 25(5):601–61. Retrieved from https://www.researchgate.net/publication/222607861_An_examination_of_college_student_money_management_tendencies.
Lopez, M. L. (2016, December 30). Many Filipinos found to be still dependent on debt. Business World Online. Retrieved from www.bworldonline.com.
Lusardi, A., & Mitchell, O. (2007a). Baby boomers retirement security: The role of planning, financial literacy and housing wealth, Journal of Monetary Economics, 54, 205-224. Retrieved from http://www.nber.org/papers/w12585.
Manulife (2016, May 2017). Filipinos good short-term savers, but rank high in debt-poll. Rappler. Retrieved from https://www.rappler.com/business/industries/209-banking-and-financial-services/124948-filipinosdebt-
asia-manulife-survey.
Nationwide Survey on Teacher Advancement for Optimum Well-Being (Project TAO) (2000). SEAMEO INNOTECH, Retrieved from http://www.seameoinnotech.org/wpcontent/uploads/2013/11/CompleteProject_ProjectTao_finalreport.pdf.
Nickell, S. J., & Quintini, G. (2002). The consequences of the decline in public sector pay in Britain: A little bit of evidence. Economic Journal 112, F107-F118.
Norvilitis, J., Merwin, M., Osberg, T., Roehling, P., Young, P., & Kamas, M.(2006). Personality factors, money attitudes, financial knowledge, and credit-card debt in college students. Journal of Applied Social Psychology, 36(6), 1395-1413. doi:10.1111/j.0021-9029.2006.00065.x.
OECD Factbook (2013). Economic, environmental and social statistics. Retrieved from http://www.oecd-ilibrary.org/economics/oecd-factbook-2013/household-debt_factbook-2013-28-en.
Oksanen, A., Aaltonen, M. & Rantala, K. (2015). Social determinants of debt problems in a Nordic Welfare State: a Finnish register-based study. Journal of Consumer Policy. Retrieved from https://www.researchgate.net.
Stango, V. & Zinman J. (2007). “Fuzzy math and red ink: When the opportunity cost of consumption is not what it seems,” Working Paper, Dartmouth College.
Statistics on Filipino Women and Men's Education. (2014, April 13). Retrieved from http://www.pcw.gov.ph/statistics/201405/statistics-filipino-women-andmens-education.
The Philippine Star. (2014, Sept. 2). 3 dead in Pangasinan school shooting. Retrieved from http://www.philstar.com/headlines/2014/09/02/1364502/3-deadpangasinan-school-shooting.
Van Praag, B. M. S., Frijters, P., & Ferrer-i-Carbonel, A. (2003). The anatomy of subjective well-being. Journal of Economic Behavior and Organisation, 51, 29-49. Retrieved from DOI: 10.1016/S0167-2681(02)00140-3.
Webley, P., & Nyhus, E. K. (2001). Life-cycle and dispositional routes into problem debt. British Journal of Psychology, 92, 423-446.
World Bank (2015). Enhancing Financial Capability and Inclusion in the Philippines – A Demand-side Assessment. Retrieved from http://responsiblefinance.worldbank.org/~/media/GIAWB/FL/Documents/
Publications/Enhancing-Financial-Capability-and-Inclusion-in-the-Philippines-FINAL.pdf.
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Published
Dec 21, 2017
Article Details
How to Cite
Ferrer, J. C. (2017). Caught in a Debt Trap? An Analysis of the Financial Well-being of Teachers in the Philippines. The Normal Lights, 11(2). https://doi.org/10.56278/tnl.v11i2.538
Section
Research Article
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