Poverty in Ghana from an Assets‐based Perspective: An Application of Probit Technique*

Abstract: This paper extends the existing literature on poverty in developing economies by examining the effects of human capital, financial capital and physical assets on the incidence of poverty in both urban and rural Ghana. The following is found: low stocks of assets appear to be a more prevalent problem associated with poverty; the returns to human capital are positive and rise with higher educational attainment, irrespective of gender; the correlation between income distribution and incidence of poverty is positive; and ownership of human, physical and financial assets reduces the probability of being poor. Against the backdrop of growth‐oriented policies, the paper calls for investments in schooling, provision of institutional credit and an enabling environment for labour market activities as strategies for the reduction of poverty.     

HIV/AIDS AND POVERTY IN SOUTH AFRICA: A BAYESIAN ESTIMATION OF SELECTION MODELS WITH CORRELATED FIXED‐EFFECTS

In this paper, we estimate the causal impact of human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS) on monetary poverty using a panel database from South Africa. We treat endogeneity and selection problems associated with HIV/AIDS by a selection model that includes correlated fixed effects both in the level and in the participation equations, which are estimated simultaneously via original Bayesian methods. We model the consequences of the illness on both labour income and income transfers, and disentangle between urban and rural households. While no significant impact of HIV/AIDS on labour income is found because of households' recomposition, we find a substantial fall in received transfers among rural population and a dramatic increase in chronic poverty.     

Remittances and child labour in Ghana: Does the gender of the household head matter?

This study investigates the effect of remittance income on child labour and the role of gender in Ghana. Data were sourced from the Ghana Living Standards Survey Round 6. In order to solve the issue of endogeneity, we adopt the instrumental variable approach. The study finds evidence that, irrespective of whoever is the head of the household, the total effect of remittances on child labour is negative. However, the negative effect is much higher for female-headed households. It is recommended that more mobile money transfer outlets be established and the cost of transferring money be reduced to the barest minimum so as to enable households to maximise the benefits of the remittances they receive. Furthermore, financial transfers should be given to female household heads upon the condition of school attendance by their children so as to reduce child labour.     

Why do parents make their children work? A test of the poverty hypothesis in rural areas of Burkina Faso

It is often argued that child labour is caused by poverty. However,much child labour takes place in rural areas characterized bysubstantial labour market imperfections. A model of rural householdlabour supply is developed that provides testable implicationsfor two versions of the poverty hypothesis: that child labouris due to a binding subsistence constraint and that child leisureis a luxury good. We find that in rural Burkina Faso childrendo not provide labour to meet households' subsistence needsand that child leisure is a normal good. The evidence suggeststhat labour market imperfections are a main reason for usingchild labour.     

Child Labour in the Philippines: Determinants and Effects

This paper analyses the supply-side socioeconomic determinants of child labour in the Philippines using data from the National Household Survey and the Labour Force Survey of the Philippines. The research methodology is that of a sequential probit model which assumes that household decisions are made in a hierarchical manner. Using this model, the impact of various household and economic characteristics on the probability of child labour is estimated. The findings highlight specific populations that should be targeted, for example, single working mothers in urban areas and poor households in rural areas. Working towards elimination of child labour will involve a multi-angled policy approach with policies complementing each other.     

Poverty and Other Determinants of Child Labor in Bangladesh

In this research we examine poverty and other determinants of child labor in Bangladesh. We define income quintiles as a means of measuring family poverty and add child and family characteristics to our model. We estimate the likelihood that a child will work, using separate logistic regression models for younger and older boys and girls in urban and rural areas. Our results support the notion that a family's poverty affects the probability that a child will work; keeping children away from work is a luxury these families cannot afford. Moreover, it is important to examine separate demographic groups in order to fully understand the determinants of child labor in Bangladesh since the effects of child and family variables on the probability that a child will work differ among these groups.     

Child labour and academic achievement: Evidence from Gansu Province in China

This paper considers the relationship between child labour and a child's academic achievement in rural China. Using a unique longitudinal, multi-level survey, the Gansu Survey of Children and Families (GSCF) which was enrolled in the Gansu province, I use a quasi-maximum likelihood estimation (QMLE) and find that more than 1 h of child labour in the previous time period has a negative effect on a child's academic achievement in the subsequent period after controlling for child talent. I also show that previous academic achievement has no strong significant effect on current child labour by applying a logistic model. Based on the data, the fact that those effects are not very big or not significant suggests that child labour in China is not a big problem when compared with other developing countries (Bacolod & Ranjan 2008).     

Household schooling and child labor decisions in rural Bangladesh

Using empirical methods, this paper examines household schooling and child labor decisions in rural Bangladesh. The results suggest the following: poverty and low parental education are associated with lower schooling and greater child labor; asset-owning households are more likely to have children combine child labor with schooling; households choose the same activity for all children within the household, regardless of gender; there is a weak association between direct costs and household decisions; finally, higher child wages encourage households to practice child labor.     

The Impact of Public Works Programme on Child Labour in Ethiopia

Given the conventional wisdom that poverty and associated income shocks are the fundamental causes of child labour, from a policy perspective, there is a perception that social safety net programmes can play a vital role in reducing child labour. While there is extensive evidence that shows the prevalence of child labour is low among beneficiaries of conditional cash transfer programmes, the impact of workfare programs on child labour has been rarely investigated in the economics literature. This paper addresses the issue by evaluating the impact of the public works component of the Productive Safety Net Programme implemented in Ethiopia in 2005. The programme aims to help poor households to build assets and develop resilience to shocks through employment in public projects. Results from child fixed effects estimations show that children in programme beneficiary households are significantly less likely than their counterparts in non‐beneficiary households to be involved in child labour. The findings suggest that, if well targeted, even safety net programmes that do not primarily target child outcomes can be useful in addressing child labour problems.     

Child Labour: a survey of selected Asian countries

While the African continent has the highest child labour force participation rates, Asia contains the largest pool of child workers. The nature, magnitude and decline in child labour vary sharply between Asian countries. East Asia now has little child labour; however, child labour continues to have a significant presence in South Asia and in parts of Southeast Asia. This paper surveys the literature on child labour in selected Asian countries, paying special attention to its causes and consequences. The evidence presented shows that Asian child labour, especially in South and Southeast Asia, has some common features. For example, the bulk of child labour is in the 10–14 years age group. The phenomenon is largely rural, and child domestic labour constitutes a significant share. The participation rate of Asian children in the 15–17 years age group in economic activities, 48.4 per cent, is the highest in the world. There is a significant gender element in Asian child labour with boys outnumbering girls in economically active work, while the reverse is the case with domestic child labour. A focus of the survey is the empirical findings that provide insights into the policy instruments that may be needed in combating this phenomenon. The survey also discusses some of the important international and national initiatives that have been taken to reduce child labour.     

Good Care Practices Can Mitigate the Negative Effects of Poverty and Low Maternal Schooling on Children’s Nutritional Status: Evidence from Accra

This study uses data from a representative survey of households with preschoolers in Accra, Ghana to: (a) examine the importance of care practices for children’s height-for-age Z-scores (HAZ); and (b) identify subgroups of children for whom good maternal care practices may be particularly important. Good caregiving practices related to child feeding and use of preventive health services were a strong determinant of children’s HAZ, specially among children from the two lower income terciles and children whose mothers had less than secondary schooling. In this population, good care practices could compensate for the negative effects of poverty and low maternal schooling on children’s HAZ. Thus, effective targeting of specific education messages to improve child feeding practices and use of preventive health care could have a major impact on reducing childhood malnutrition in Accra.     

Labour market dimensions of poverty in Indonesia

This paper focuses on labour market issues relevant to poverty alleviation. Patterns of participation, unemployment and employment are examined among the poor compared with the non-poor in general, among urban and rural households, and among various socio-demographic groups. Using data from the 2002 National Socio-Economic Survey, the paper finds that low participation in the workforce and high unemployment, while important, are less closely related to poverty status than expected, especially among spouses of household heads. However, sector of employment and underemployment are closely associated with poverty, especially for those in informal jobs in urban areas; in rural areas, the poor are heavily concentrated in agriculture. Among the poor, young people and females are more likely to be underemployed and to work in agriculture than prime-age workers. The data suggest that labour market policies that tend to protect those in formal sector employment are unlikely to reduce poverty much, if at all.     

Parental Education and child Nutrition in Indonesia

This study uses 1989 Susenas household data to examine the impact of parental education on pre-school children's nutritional status, as measured by weight-for-age Z-scores. Reduced form regressions are estimated separately for boys and girls in rural and urban areas; explanatory variables include mother's and household head's education; per capita household expenditure; and aspects of the household sanitary environment. The analysis controls for influence of unobserved heterogeneity at village level, e.g. differences in prices and medical service provision. The estimates show a significant effect of parental schooling on child health status, varying between urban and rural areas, and by child gender and age. Mothers with secondary education typically have healthier boys than those with less schooling, while this effect is seen for girls only if the mother has more than secondary education. Maternal schooling significantly affects 2–5 year olds' health, but has little direct effect on that of younger children.     

Human Resource Underutilization in an Era of Poverty Reduction: An Analysis of Unemployment and Underemployment in Ghana

Abstract: Unemployment is more prevalent in urban than rural Ghana, while underemployment is pervasive in rural Ghana. The paper analyses trends in these two forms of human resource underutilization and examines their major determinants. It is found that a positive association exists between the underemployment rate and the incidence of poverty in specific industries. The data supports the importance of demographics, education and firm sizes as major determinants of unemployment. Furthermore, these factors together with type of employment are the factors influencing underemployment. To reduce the level of unemployment and underemployment, the government should provide support for: (1) growth of private sector firms and informal sector activities; and (2) rural alternatives to agricultural activities. These implications are also relevant to other African countries trying to combat the twin problems of unemployment and underemployment.     

Female education and child mortality in Indonesia

This paper uses a sample of 6620 women from the 1994 Indonesian Demographic and Health Survey to examine the relationship between female education and child mortality in Indonesia. Female education is measured in terms of both years of education and literacy. Both primary education and secondary schooling significantly decrease the probability of child death, while literacy plays an insignificant role. When the sample is divided into urban and rural locations, primary and secondary education are significant in both areas in reducing the likelihood of a mother experiencing child mortality. The benefits of public and private infrastructure appear to differ in rural and urban areas. The results confirm that investment in female human capital lowers the probability of child mortality.     

How to Model a Child in School? A Dynamic Macrosimulation Study for Tanzania

Universal primary education is regarded as one of the key pillars of sustainable development. The positive influence of education on growth is supported by many empirical studies. However, the effects of education on labour supply, poverty reduction and welfare as well as subsistence agriculture are hardly traceable in an econometric set‐up, given the complex interactions and the long‐term nature of education. An economy‐wide dynamic simulation model provides a well‐suited toolkit to analyse the effects of increased school provision in these aspects and provides insights into the intertemporal aspects of the schooling decision of children. We develop a macroeconomic model that explicitly includes education and human capital allocation, and takes into account that the possibility of child labour increases the opportunity costs of human capital formation. In an application for Tanzania, we find that a large‐scale investment programme in education might have a negative effect on both gross domestic product (GDP) growth and high‐skilled labour supply in the short term but leads to higher GDP and welfare as well as significantly reduced child labour supply in the medium to long term.     

Explaining the High Incidence of Child Labour in Sub–Saharan Africa

There has been a growing interest on the issue of child labour among the academic and professional circles in recent times. Estimates show that the number of under–aged working children in Africa could reach some 100 million in the next 10–15 years, posing serious challenges to African policy–makers. Little is known about the likely causes for the rise in child labour in Africa. The lack of data has seriously undermined the amount and quality of research on the topic particularly in sub–Saharan Africa. The intent of the present study is to examine the link between children’s labour force participation and some macroeconomic variables using aggregated data from sub–Saharan Africa. The results show that the high incidence of child labour in sub–Saharan Africa could be explained, among other things, in terms of the high incidence of poverty, the predominance of a poorly developed agricultural sector, high fertility rates leading to high population growth, and low education participation. Contrary to some recent arguments, which questioned the direct link between poverty and child labour, the results of this study show that poverty is indeed one of the most important reasons for the high incidence of child labour in Africa. This complex problem calls for comprehensive and multi–faceted interventions including the adoption of poverty reduction strategies, introduction of labour–saving technologies for the agricultural production, an aggressive provision of primary education, and the mobilization of the communities for creating awareness. Ces dernières années, la problématique du travail des enfants a suscié un intérÁt croissant dans les cercles académiques et professionnels. Selon les estimations, le nombre d’enfants mineurs qui travaillent en l’Afrique pourrait atteindre quelque 100 millions au cours des dix è quinze prochaines années, ce qui pose un défi majeur pour les décideurs politiques africains. On sait peu de choses sur les causes probables de l’incidence croissante du travail des enfants en Afrique. Le manque de données a un effet négatif tant sur la quantité que sur la qualité des recherches sur le sujet, en particulier en Afrique subsaharienne. La présente étude a pour objet d’examiner les liens entre la participation des enfants au marché du travail et plusieurs variables macroéconomiques en se basant sur des données agrégées provenant d’Afrique subsaharienne. Les résultats indiquent que la forte incidence du travail des enfants en Afrique subsaharienne découle notamment de la forte incidence de la pauvreté, la prédominance d’un secteur agricole peu développé, les taux de fertilitéélevés entraÑnant une forte croissance démographique, et les faibles taux de scolarisation. Contrairement è ce que laissent entendre des arguments avancés récemment, qui mettent en cause le lien direct entre la pauvreté et le travail des enfants, les résultats de cette étude montrent que la pauvreté est en effet l’une des causes majeures de la forte incidence du travail des enfants en Afrique. Ce problème complexe appelle des interventions globales et multiples, axées notamment sur l’adoption de stratégies de réduction de la pauvreté, l’introduction de technologies génératrices d’économie de main d’uvre pour la production agricole, un programme agressif de scolarisation au niveau primaire, et la mobilisation des communautés pour la sensibilisation.     

Decomposing Poverty Changes in Zambia: Growth,Inequality and Population Dynamics

Abstract: During the 1990s, the Zambian economy underwent major structural adjustments. This paper presents an application of a recently proposed poverty decomposition that attributes changes in poverty to income growth, changes in inequality and population dynamics. Our results confirm earlier findings that the existence of a severe urban bias in the economy effectively shielded large parts of the rural population from the economic slump caused by the structural adjustments. In addition, we find that the exodus from urban centres that followed the adjustments contributed significantly to the increase in national poverty. The latter finding highlights the importance of considering population movements when studying poverty, especially in situations where policy changes affect migrant labour, as was the case for the Zambian copper industry.     

The impact of primary schooling on economic development: a review of the evidence

The contribution of primary schooling to economic development is greater than has conventionally been percieved. This review of recent research shows that primary schooling increases labour productivity in both urban and rural sectors, and that the economic returns to such investment are typically high. In addition, it reduces fertility, improves health and nutrition, and promotes other behavioural and attitudinal changes which are helpful to economic development. Investment strategies which give primary schooling an important place would be more conducive of growth-with-equity than many alternatives. Priorities for government and donor policies are indicated, as are those for future research.     

Socioeconomic Changes and the Decline in Poverty: A View from Three Villages in the Philippines, 1985–1997*

The present paper examines socioeconomic changes and decline in rural poverty using a panel dataset collected in the Philippine villages in 1985, 1993 and 1997. The most important finding is the transition of the rural economy away from a regime of low nonfarm income to a regime of high nonfarm income accompanied by a marked decline in poverty. The relative contribution of access to land on rural poverty reduction declined, whereas the relative contribution of human capital, more importantly represented by college schooling, increased over time.