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The Rich or the Poor: Who Gains from Public Education Spending in Ghana?

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  • Mawuli Gaddah
  • Alistair Munro

    (National Graduate Institute for Policy Studies)

Abstract

This paper examines the incidence of public education subsidies in Ghana. Since the late 1990s, Ghana’s government has increasingly recognised human capital as a cornerstone to alleviating poverty and income inequality, causing dramatic increases of government expenditures to the education sector. At the same time user fees have been introduced in higher education while basic education is being made progressively free. The question then is, whether these spending increases have been effective in reaching the poor and to what extent? What factors influence the poor’s participation in the public school system? We attempt to address these issues, employing the standard benefit incidence methods and the willingness-to-pay method using a nested multinomial logit model. The results give a clear evidence of progressivity with consistent ordering: pre- schooling and primary schooling are the most progressive, followed by secondary, and then tertiary. The poorest quintile gains 14.8% of total education benefts in 2005 compared to the richest quintile benefit of 26.3%. Own price and income elasticities are higher for private schools than public schools and for secondary than basic schools.

Suggested Citation

  • Mawuli Gaddah & Alistair Munro, 2011. "The Rich or the Poor: Who Gains from Public Education Spending in Ghana?," GRIPS Discussion Papers 11-12, National Graduate Institute for Policy Studies.
  • Handle: RePEc:ngi:dpaper:11-12
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    1. repec:lje:journl:v:2:y:2007:i:2:p:27-48 is not listed on IDEAS
    2. Jorge Martinez-Vazquez, 2001. "The Impact of Budgets on the Poor: Tax and Benefit," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0110, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
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    6. Edward Morey & Kathleen Rossmann, 2008. "Calculating, With Income Effects, the Compensating Variation for a State Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 39(2), pages 83-90, February.
    7. van de Walle, Dominique, 1998. "Assessing the welfare impacts of public spending," World Development, Elsevier, vol. 26(3), pages 365-379, March.
    8. Tinbergen, Jan, 1991. "On the measurement of welfare," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 7-13, October.
    9. Ahmed Nawaz Hakro & Muhammed Akram, 2007. "The Incidence of Government Expenditures on Education and Health: Microeconomic Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 12(2), pages 27-48, Jul-Dec.
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