Investigating the Impact of Household Expenditure on Formal Education in Ghana: An Empirical Study

Abstract

The study examined household education expenditure in Ghana using data from the 2016-2017 GLSS VII survey. It applied the Tobit model to analyze annual formal education spending, addressing a gap in empirical research using this recent dataset. The study results are that an increase in annual household income of 100 cedis per year increases actual household expenditure on education by about 26 cedis. Households in the Savannah Zones in Ghana show positive annual expenditure on education, while the Forest and Accra Zones show negative correlations with education expenditure. The annual formal education expenditures of rural households in Ghana no longer lag behind the annual education expenditures of urban households. Positive education budgets in rural families have the ability to bridge an unequal society, as rural students' access to education leads to increased equality in the development of specialised human capital in Ghana, which is an important finding. Policy-makers in Ghana must take pragmatic steps to drastically reduce the 36 percent of households that do not spend on formal education in a year as a public education policy measure to achieve the SDG4 target and the AU Agenda 2063 targets.