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Education, incomes, poverty and inequality in Ghana in the 1990s

  • Francis Teal

Three issues are addressed in this paper. First, we use both household and macro data to establish how fast per capita consumption and incomes grew in Ghana in the 1990s. Second, we ask how much of the rise in incomes was due to rises in the level of human capital and how much reflected underlying technical progress. Third, we assess the implications of how incomes rose for the interpretation of changes in the poverty profile. Four household surveys are used to show changes in both expenditures and incomes over the decade. The household surveys show that both consumption per capita and incomes rose by 12 per cent, a rate of 1 per cent per annum. This figure is identical to the growth rate for consumption per capita implied by the macro accounts. The average level of education of the population rose by 27 per cent over the decade which led to a rise of 3 per cent in per capita consumption. We find, on average, no evidence for any underlying technical progress. We show that the rise in income was associated with modest falls in the head count and poverty gap measures of poverty but with virtually no change in the severity of poverty measure. The fall in the head count measure was too small to prevent the absolute number of poor people from rising. Inequality increased with the incomes of the non-agricultural self-employed, with given levels of human capital, falling both absolutely and relative to wage workers.

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Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2001-21.

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Date of creation: 2001
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Handle: RePEc:csa:wpaper:2001-21
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  1. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
  2. Robert J. Barro, 1996. "Determinants of Economic Growth: A Cross-Country Empirical Study," NBER Working Papers 5698, National Bureau of Economic Research, Inc.
  3. Robert J. Barro & Jong-Wha Lee, 1993. "International Comparisons of Educational Attainment," NBER Working Papers 4349, National Bureau of Economic Research, Inc.
  4. Vijverberg, Wim P. M., 1995. "Returns to schooling in non-farm self-employment: An econometric case study of Ghana," World Development, Elsevier, vol. 23(7), pages 1215-1227, July.
  5. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  6. Glewwe, Paul, 1996. "The relevance of standard estimates of rates of return to schooling for education policy: A critical assessment," Journal of Development Economics, Elsevier, vol. 51(2), pages 267-290, December.
  7. Simon Appleton & John Hoddinott & John MacKinnon, 1996. "Education and health in sub-Saharan Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(3), pages 307-339.
  8. Robert J. Barro, 1989. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc.
  9. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
  10. Gemmell, Norman, 1996. "Evaluating the Impacts of Human Capital Stocks and Accumulation on Economic Growth: Some New Evidence," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(1), pages 9-28, February.
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