In the debate on whether two years must be added to the current Philippine basic
education system, proponents for the change argue that it will enable the Filipino worker
to compete in global markets. Opponents of this change say that it will further burden
parents with a higher cost of having their children educated. Moreover, some say it would
be better to raise the percentage of students who graduate from high school. In this
context, this paper attempts to measure the private costs and benefits of shifting to the K-
12 education system. It estimates a Mincer’s extended human capital earnings function
using 2009 LFS data and uses selected coefficients to measure the increase in wage if
two more years will be added to the basic education cycle and the effect on wages if
more students graduate from high school. The paper estimates the additional private
costs associated with two more years of education.
We find that: 1) Adding two more years to high school increases the wage of a
male high school graduate worker who works as a plant and machine operator in a
private manufacturing business in NCR by 225 to 342 pesos. If he is a college graduate,
the increase in wage ranges from 294 to 480 pesos; 2) A 10% increase in the share of
high school graduate and above in NCR, increases the monthly wages of male and
female high school graduates working in NCR by 2,901 pesos and 2,555 pesos. If they
are college graduates, the increase in monthly wages is higher amounting to 4,375 pesos
for males and 3,854 pesos for females; 3) Using the estimated private costs of adding
two years of schooling as a basis, public school students will most likely benefit from the
proposed reform as they could take 2-3 years to recover their investments while private
school students could take more than 15 years.