The Effect of Philippine National Wage Variation: The Top-Down Microsimulation Model

The study aims to investigate the effect on Philippine occupational choice of House Bill No.7787, also known as the National Wage Law, which was filled by the Philippine Congress that mandates the implementation of an across the board minimum daily wage of Php750.00 to all workers in the Philippines. This study had used the Computable General Equilibrium-Top-Down Behavioral Microsimulation approach to determine the effect of National Wage Law on occupational choice. The results of the study revealed that the implementation of said National Wage Law would affect the distribution of labor force across occupational classification such as wage workers, entrepreneurial farming activities workers, and entrepreneurial non-farming activities workers. This has resulted from a higher utility that will be derived from the wage working sector once the National Wage Law will be implemented. Further, among regions in the Philippines, the Calabarzon, National Capital Region, and Central Luzon had recorded the highest number of workers who prefer the wage income sector. The findings of the study also suggest that the Philippine agricultural sector will be greatly affected by the National Wage Law due to the preference of workers to shift from the entrepreneurial farming sector to belong to the wage sector.