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Literacy, Skills and Welfare: Effects of Participation in Adult Literacy Programs

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Niels-Hugo Blunch
Claus C Pörtner

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Abstract

This paper examines the effect of adult literacy program participation on household consumption in Ghana. The adult literacy programs in Ghana are of special interest since they are more comprehensive than standard literacy programs and incorporate many additional topics. We use community fixed effects combined with instrumental variables to account for possible endogenous program placement and self-selection into program participation. For households where none of the adults have completed any formal education we find a substantial, positive and statistically significant effect on household consumption. Our preferred estimate of the effect of participation for households without education is equivalent to a ten percent increase in consumption per adult equivalent. The effects of participation on welfare for other households are smaller and not statistically significant, and become smaller the more educated the household is. We find positive and statistically significant effects of participation on literacy and numeracy rates, although the increases are too small to be the only explanation for the welfare effects. There is also evidence that participants are more likely to engage in market activities and to sell a variety of agricultural goods. Taking account of both direct cost and opportunity cost we argue that the social returns to adult literacy programs are substantial.

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Paper provided by University of Washington, Department of Economics in its series Working Papers with number UWEC-2005-23-R.

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Date of creation: Sep 2005
Date of revision: Aug 2009
Handle: RePEc:udb:wpaper:uwec-2005-23-r

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  1. Appleton, S., 1995. "'The Rich Are Just Like Us Only Richer' Poverty Functions or Consumption Functions?," Working Papers Series 95-4, Centre for the Study of African Economies, University of Oxford.
  2. John H. Tyler & Richard J. Murnane & John B. Willett, 1999. "Do the Cognitive Skills of School Dropouts Matter in the Labor Market?," NBER Working Papers 7101, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Canagarajah, Sudharshan & Thomas, Saji, 1997. "Ghana's labor market (1987-92)," Policy Research Working Paper Series 1752, The World Bank. [Downloadable!]
  5. Barry R. Chiswick & Yew Liang Lee & Paul W. Miller, 2003. "Schooling, Literacy, Numeracy and Labour Market Success," The Economic Record, The Economic Society of Australia, vol. 79(245), pages 165-181, 06. [Downloadable!] (restricted)
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  6. Boissiere, M & Knight, J B & Sabot, R H, 1985. "Earnings, Schooling, Ability, and Cognitive Skills," American Economic Review, American Economic Association, vol. 75(5), pages 1016-30, December. [Downloadable!] (restricted)
  7. Murnane, Richard J & Willett, John B & Levy, Frank, 1995. "The Growing Importance of Cognitive Skills in Wage Determination," The Review of Economics and Statistics, MIT Press, vol. 77(2), pages 251-66, May. [Downloadable!] (restricted)
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  8. Christian Dustmann & Francesca Fabbri, 2003. "Language proficiency and labour market performance of immigrants in the UK," Economic Journal, Royal Economic Society, vol. 113(489), pages 695-717, 07. [Downloadable!] (restricted)
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  9. Ribar, David C., 2004. "What Do Social Scientists Know About the Benefits of Marriage? A Review of Quantitative Methodologies," IZA Discussion Papers 998, Institute for the Study of Labor (IZA). [Downloadable!]
  10. Green, David A. & Craig Riddell, W., 2003. "Literacy and earnings: an investigation of the interaction of cognitive and unobserved skills in earnings generation," Labour Economics, Elsevier, vol. 10(2), pages 165-184, April. [Downloadable!] (restricted)
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