Human capital investment and poverty reduction over generations: A case from the rural Philippines, 1979–2003

Despite serious efforts by local governments and donor communities over the past few decades, poverty remains an unresolved global issue. According to estimates by the World Bank, more than 1.2 billion people were classified as extreme poor in 1998, living on less than one dollar a day (World Bank 2000). To combat this pervasive poverty, the United Nations declared as the first of its Millennium Development Goals (MDGs) to halve the proportion of the extreme poor from the 1990 level by 2015. Because poverty is overwhelmingly a rural phenomenon in most developing countries, a major challenge to achieving this target must be to find ways in which rural poverty can be effectively reduced (e.g., IFAD 2003; Schultz 1980).