Economics of Education: Household Welfare, Poverty and Child Labour

A central aim of the Government of Ghana “is to have a civil, affordable, quality education at all levels, but in particular at the basic school level, where life really begins”, as cited in the interview with the Minister of Education in late 2010. Education is, however, still not civil (universal) and remains unaffordable for many of the well over a million children of basic school-age who are at the periphery of the school system often due to direct and indirect costs as well as associated opportunity costs of schooling. This chapter sheds light on the interrelationships between schooling, poverty and child labour. It explores the basic question of how widespread levels of poverty and income inequalities across the country affect the demand for, supply of and exclusion from educational services. It also examines, on the same token, the extent to which one’s educational status influences how much one earns later in life, analysing not only the private but also public rate of return to education. Finally, by applying descriptive statistics and regression analysis it takes a particular focus on identifying the determinants of child labour and school participation and their interactions with and consequences on each other, from the findings of which a number of policy options to combat child labour and increase schooling opportunities are derived and discussed.