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The rich or the poor: who gains from public education spending in Ghana?

Mawuli Gaddah (Real Sector Division, Ministry of Finance, Accra, Ghana.)
Alistair Munro (Department of Economics, National Graduate Institute for Policy Studies (GRIPS), Tokyo, Japan.)
Peter Quartey (Institute of Statistical, Social and Economic Research, University of Ghana, Accra, Ghana.)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 9 February 2015

Abstract

Purpose

The purpose of this paper is to examine the incidence of public education subsidies in Ghana. Since the late 1990s, Ghana’s government has increasingly recognized human capital as key 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?

Design/methodology/approach

The authors address the key issues by employing both the standard benefit incidence methods and the willingness-to-pay method.

Findings

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. Own price and income elasticities are higher for private schools than public schools and for secondary than basic schools.

Practical implications

Given the liquidity constraints African governments face yet there is the need to improve the human capacity of the countries, this study offers solution to how to optimally allocate the educational budget.

Originality/value

The use of policy simulations to ascertain the incidence of public spending on education is innovative as far as previous studies in Africa is concerned.

Keywords

Acknowledgements

JEL Classification – H22, H52, H53

Citation

Gaddah, M., Munro, A. and Quartey, P. (2015), "The rich or the poor: who gains from public education spending in Ghana?", International Journal of Social Economics, Vol. 42 No. 2, pp. 112-131. https://doi.org/10.1108/IJSE-11-2013-0269

Publisher

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Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited