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

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  • Francis Teal

    (Centre for the Study of African Economies)

Abstract

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 ssociated 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 he incomes of the non-agricultural self-employed, with given levels of human capital, falling both absolutely and relative to wage workers.

Suggested Citation

  • Francis Teal, 2004. "Education, incomes, poverty and inequality in Ghana in the 1990s," Development and Comp Systems 0409006, EconWPA.
  • Handle: RePEc:wpa:wuwpdc:0409006
    Note: Type of Document - pdf; pages: 32
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    References listed on IDEAS

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    1. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, January.
    2. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    3. Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
    4. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    5. 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.
    6. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    7. 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.
    8. 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.
    9. 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.
    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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    Cited by:

    1. Charles Ackah, & Oliver Morrissey, & Simon Appleton, "undated". "Who Gains from Trade Protection in Ghana? A Household-Level Analysis," Discussion Papers 07/02, University of Nottingham, CREDIT.
    2. Rulof P. Burger & Francis J. Teal, 2015. "The Effect of Schooling on Worker Productivity: Evidence from a South African Industry Panel," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 24(5), pages 629-644.
    3. Francis Teal, 2006. "Consumption and welfare in Ghana in the 1990s," Journal of Development Studies, Taylor & Francis Journals, vol. 42(7), pages 1252-1269.
    4. Rulof P Burger & Francis J Teal, 2013. "Measuring the option value of education," Working Papers 15/2013, Stellenbosch University, Department of Economics.
    5. repec:csa:wpaper:2013/13 is not listed on IDEAS
    6. Howard White & Edoardo Masset, 2005. "Books, Buildings and Learning Outcomes: an impact evaluation of World Bank assistance to basic education in Ghana," Development and Comp Systems 0504013, EconWPA.
    7. Frikkie Booysen & Ronelle Burger & Gideon Du Rand & Michael von Maltitz & Servaas Van der Berg, 2007. "Trends in Poverty and Inequality in Seven African Countries," Working Papers PMMA 2007-06, PEP-PMMA.
    8. Burger, Ronelle & Booysen, Frikkie & van der Berg, Servaas & von Maltitz, Michael, 2006. "Marketable Wealth in a Poor African Country: Using an index of consumer durables to investigate wealth accumulation by households in Ghana," WIDER Working Paper Series 138, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    Ghana; real incomes; poverty.;

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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