R. Sudharshan Canagarajah

Child Labor and Schooling in Ghana

Child labor is a widespread, growing problem in the developing world. About 250 million of the worlds children work, nearly half of them full-time. Child labor (regular participation in the labor force to earn a living or supplement household income) prevents children from participating in school. One constraint on Ghanas economic growth has been inadequate human capital development. According to 1992 data for Ghana, one girl in three and one boy in four does not attend school. The figures are worse in rural areas. The authors studied the dynamics of how households decided whether to send children 7 through 14 to school or to work, using household survey data for 1987-92. They do not address the issue of street kids, which does not imply that they are less important than the others. Unlike child labor in Asia, most child labor in Africa, especially Ghana, is unpaid work in family agricultural enterprises. Of the 28 percent of children engaged in child labor, more than two-thirds were also going to school. Of all children between 7 and 14, about 90 percent helped with household chores. Boys and girls tend to do different types of work. Girls do more household chores while boys work in the labor force. The data do not convincingly show, as most literature claims, that poverty is the main cause of child labor. But poverty is significantly correlated with the decision to send children to school, and there is a significant negative relationship between going to school and working. Increased demand for schooling is the most effective way to reduce child labor and ensure that Ghanas human capital is stabilized. The high cost of schooling and the poor quality and irrelevance of education has also pushed many children into work. And family characteristics play a big role in the childs decision to work or go to school. The fathers education has a significant negative effect on child labor; the effect is stronger on girls than on boys. So adult literacy could indirectly reduce the amount of child labor.

Non-farm income, gender, and inequality: evidence from rural Ghana and Uganda

Abstract This paper examines how the distribution of earnings in rural Ghana and Uganda differs by income type and by gender. We find that non-farm earnings contribute to rising inequality, but that lower income groups also benefit due to strong overall growth in non-farm earnings. The inequality-inducing effect is driven by self-employment income; wage income, on the other hand, reduces inequality. The tendency of non-farm income to contribute to inequality is greater among female-headed households for whom self-employment is important and non-farm opportunities more constrained. Determinants of non-farm income are estimated and appear to be strongly related to location, education, age, and distance to market. Estimates of the linkages to agriculture in Ghana are weaker than expected, showing the non-farm sector to be functioning more as an alternative activity to agriculture than as a complement.

Is There a Place for Virtual Poverty Funds in Pro-Poor Public Spending Reform? Lessons from Uganda's PAF

Various developing countries with weak public expenditure management systems are establishing virtual poverty funds (VPFs), drawing on the experience of Ugandas Poverty Action Fund. As a mechanism for tagging and tracking the performance of specific poverty-reducing expenditures in the budget, a VPF can be useful. However, this article argues that such devices should be treated from the outset as transitional, and as part of wider processes of strengthening public expenditure management; otherwise, they can seriously distort public expenditure allocations and management systems, potentially undermining growth. Emphasis needs to be placed on identifying the right balance of expenditures in the entire budget; improving the effectiveness and efficiency of existing allocations; and developing better public-sector policies for promoting pro-poor private sector growth.

Public Health and Education Spending in Ghana in 1992-98: Issues of Equity and Efficiency

Using primary data from the health and education ministries, and household survey data from the Ghana Statistical Service, the authors analyze equity, and efficiency issues in public spending on health, and education in Ghana in the 1990s. Public expenditures in the education sector, declined in the second half of the 1990s. Basic education enrollment has been stagnant, or declining in public schools, but increasing in private schools, resulting in a moderate increase in total enrollment. Regional disparities are significant, with lower public resource allocations, and lower enrollment ratios in the three poorest regions. The quality of basic education in public schools remains poor, while it has steadily improved in private schools. Enrollments in higher levels are lagging behind those in basic education. Ghana ranks high among West African countries in health indicators, although its health expenditures tend to favor the non-poor. While more of the rural population have gained access to health services in recent years, many still have limited access, or none. Moreover, there is no link between the pattern of public expenditures - especially the pattern of immunization across Ghana - and health outcomes. To ensure that social services are efficiently, and equitably delivered in a fiscally constrained economy, the authors argue, public expenditures need to be linked to outcomes.

Gender, Poverty, and Nonfarm Employment in Ghana and Uganda

The authors provide evidence that womens non-farm activities help reduce poverty in two economically and culturally different countries, Ghana and Uganda. In both countries rural poverty rates were lowest - and fell most rapidly - for female heads of household engaged in non-farm activities. Participation in non-farm activities increased more rapidly for women, especially married women and female heads of household, than for men. Women were more likely than men to combine agriculture and non-farm activities. In Ghana it was non-farm activities (for which income data are available ) that provided the highest average incomes and the highest shares of income. Bivariate profit analysis of participation shows that in Uganda female heads of household and in Ghana women in general are significantly more likely than men to participate in non-farm activities and less likely to participate in agriculture.

The Poverty Reduction Strategy Approach Six Years on: An Examination of Principles and Practice in Uganda

It is over six years since the World Bank and the IMF started promoting a PRS approach to development management in low-income countries. The 2005 review endorsed the approach, but highlighted the need for a renewed focus on the principles underpinning it: country ownership; results orientation; comprehensiveness; partnership focus; and long-term outlook. Uganda is often hailed as one of the best PRS performers. This article finds that Ugandas Poverty Eradicaton Action Plan (PEAP) has brought significant gains to development management, but that its performance against several of the PRS principles is disappointing. A return to these principles could improve the practice of the government and development partners around the PEAP - a finding likely to be applicable to many countries implementing a PRS. Copyright 2006 Overseas Development Institute.

The Structure and Determinants of Inequality and Poverty Reduction in Ghana, 1988-92

Using three rounds of the Ghana Living Standard Survey, conducted between 1988 and 1992, the authors present findings that shed light on the structure of inequality among different socioeconomic groups in different geographic areas, in the context of poverty reduction. First, poverty reduction can be attributed mainly to improvements in both average levels of income and the pattern of its distribution in the informal and nonfarm sectors in other cities and rural areas outside the capital city, Accra. Second, an analysis of different measures of inequality reveals that the most important changes in the degree of inequality took place at the lower end of the distribution. But the direction of change was different in Accra compared with the localities outside Accra. In Accra, while inequality increased overall, the inequality in the lower part of the distribution increased much more. In other cities, there was a more or less uniform improvement all along the distribution. But in the rural areas, there was a significant improvement at the lower end, but a deterioration at the upper end. Third, structural adjustment - which aimed to cut back public sector employment and stimulate activities in the private sector - raised living standards in rural areas and other cities, but not in Accra. The public sector is much larger in Accra than in other cities and rural areas. Contraction of the public sector in other cities and rural areas was compensated for by income growth in the informal and nonfarm sectors. But contraction of Accras large public sector dominated the local economy, so living standards declined in both formal and informal sectors. Accras economy will probably grow as its private and informal sectors grow. Fourth, major shifts in the population occurred in all localities from the formal to the informal sector, but the magnitude of the shift was largest in Accra - in fact, several times more than in the other localities. The deterioration of the income at the lower part of the distribution in both the formal and the informal sectors is mainly responsible for the decline in the welfare of the low income households in Accra. These findings suggest that an integrated regional strategy, taking into account the local socioeconomic structure, is necessary for achieving economic growth and poverty reduction in all regions. Another important finding: The poor do not benefit as much from education as the nonpoor do because there is very low return (in income) to primary education, the highest level most poor Ghanaians can hope for. Education helps increase, rather than decrease, inequality, so primary education for the poor should be designed to provide them with income-earning skills. Developing economic strategies for sustainable poverty reduction will require further research on activities in the informal sector. Another issue that requires investigation is the role of different administrative regions in the determination of household welfare that seems to have changed over the period under study. Findings from such an analysis will facilitate the design of appropriate regional strategies for poverty reduction in Ghana.

Ghana's labor market (1987-92)

Using the household survey and other data sources, the authors analyze returns to education and other aspects of Ghanas labor market profile from 1987 to 1991. The labor force grew slower than the population did between 1980 and 1990, but the supply of labor is expected to increase as the population of youth is expected to grow faster from 1990 to 2000. And labor force participation rates for 26- to 45-year-olds have been increasing rapidly. Over time, the average labor force participation rates of women have become equal to mens; that of children younger than 15 has remained unchanged at 38 percent. More than half of Ghanas child laborers are employed in agriculture. The formal sectors share of employment is on the decline, while the private informal sectors share has increased, especially in urban areas. Over time, the informal sector (in which most workers have a primary education or less) has absorbed more labor than the formal sector (in which most workers have middle or secondary schooling). Unemployment is pervasive in urban areas, and is less visible in rural areas. Labor productivity may not have increased and is possibly declining. Between 1987 and 1992, there was reverse migration, with many people moving from urban to rural areas, mostly for family reasons. Employment-related migration has also been on the increase. As is true elsewhere, the level of education affects participation in the labor force. Literacy rates for women are lower than those for men, which is one reason men dominate the private formal sector. The rate of return to education increases with higher education and work experience. The return for each additional year of schooling rangesfrom 4 percent to 6 percent in Ghana, quite high for a Sub-Saharan African country. Private and social returns to education are greater for primary than for secondary or postsecondary education.