The Economics of School Quality Investments in Developing Countries: An Empirical Study of Ghana

383 Pages·1999·15.528 MB·English

by  Paul Glewwe (auth.)

STUDIES ON THE AFRICAN ECONOMIES
General Editors: Paul Collier and Jan Willem Gunning
Published in association with the Centre for the Study of African
Economies, University of Oxford
Editorial Board:
Paul Collier, Director, Development Research Group, World Bank, and
Professor of Economics, University of Oxford; Jan Will em Gunning,
Professor of Economics, University of Oxford, and Free University,
Amsterdam, and Director, Centre for the Study ofA frican Economies,
University of Oxford; Ibrahim Elbadawi, World Bank; John Hoddinott,
Research Fellow, International Food Policy Research Institute,
Washington, DC; Chris Udry, Professor of Economics, Yale University
This important new series provides authoritative analyses of Africa's
economies, their performance and future prospects. The focus will be on
applying recent advances in economic theory to African economies to
illuminate and analyse the recent processes of economic reform and
future challenges facing Africa. The books, published in association with
the Centre for the Study of African Economies, will bring together top
scholars from universities and international organizations across the
world.
Titles include:
Arne Bigsten and Steve Kayizzi-Mugerwa
CRISIS, ADJUSTMENT AND GROWTH IN UGANDA
A Study of Adaptation in an African Economy
Paul Collier and Cathy Pattillo (editors)
REDUCING THE RISK OF INVESTMENT IN AFRICA
Paul Glewwe
THE ECONOMICS OF SCHOOL QUALITY INVESTMENTS IN
DEVELOPING COUNTRIES
An Empirical Study of Ghana
John Knight and Carolyn Jenkins
ECONOMIC POLICIES AND OUTCOMES IN ZIMBABWE
Lessons for South Africa
JoAnn Paulson (editor)
AFRICAN ECONOMIES IN TRANSITION
Volume l: The Changing Role of the State
JoAnn Paulson (editor)
AFRICAN ECONOMIES IN TRANSITION
Volume 2: The Reform Experience
The Economics of
School Quality
Investments in
Developing Countries
An Empirical Study of Ghana
Paul Glewwe
Senior Economist
The World Bank
Washington, DC
with contributions by
Jaikishan Desai, Dean Jolliffe, Raylynn Oliver and
Wim Vijverberg
in association with
Palgrave Macmillan
First published in Great Britain 1999 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS and London
Companies and representatives throughout the world
A catalogue record for this book is available from the British Library.
ISBN 978-1-349-15034-2 ISBN 978-1-349-15032-8 (eBook)
DOI 10.1007/978-1-349-15032-8
First published in the United States of America 1999 by
ST. MARTIN'S PRESS, INC.,
Scholarly and Reference Division,
175 Fifth Avenue, New York, N.Y. 10010
ISBN 978-0-312-22139-3
Library of Congress Cataloging-in-Publication Data
Glewwe, Paul, 1958-
The economics of school quality investments in developing
countries : an empirical study of Ghana /Paul Glewwe with
contributions by Jaikishan Desai ... [et al.].
p. cm. -(Studies on the African economies)
Includes bibliographical references (p. ) and index.
ISBN 978-0-312-22139-3
School improvement programs-Ghana. 2. Educational evaluation
1.
-Ghana. 3. Human capital-Ghana. 4. Economic development-Effect
of education on. I. Title. II. Series.
LB2822.84.G4G54 1999
338.4'737'09667-dc21 98-33305
CIP
© Centre for the Study of African Economies 1999
Softcover reprint of the hardcover 1st edition 1999 978-0-333-76383-4
All rights reserved. No reproduction, copy or transmission of this publication may be made
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Any person who does any unauthorised act in relation to this publication may be liable to
criminalprosecution and civil claims for damages.
The authors have asserted their rights to be identified as the authors of this work in
accordance with the Copyright, Designs and Patents Act 1988.
This book is printed on paper suitable for recycling and made from fully managed and
sustained forest sources.
10 9 8 7 6 5 4 3 2 1
08 07 06 05 04 03 02 01 00 99
Contents
List of Figures ............................................ ix
List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv
Part I: Analysing Investments in Education
1. Measuring the Returns to Investments in Education:
Overview and Critique . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1 The Basic Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 The Human Capital Model and
Rates of Return to Education . . . . . . . . . . . . . . . . . . . . . . . . 5
1.3 The Need for an Alternative Method . . . . . . . . . . . . . . . . . . 8
2. A New Method to Analyse Investments in Education . . . . . 17
2.1 The Expanded Human Capital Model ............... 17
2.2 Using Cost-Benefit Analysis to Choose
Among Different School Quality Investments ......... 19
2.3 Evaluating School Quality Investments using
the Expanded Human Capital Model . . . . . . . . . . . . . . . . 26
2.4 Some Complicating Factors with the Method . . . . . . . . . 30
2.5 Data Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.6 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Part II: The Impact of Investments in School Quality
on Cognitive Skills
3. A Method for Estimating the Determinants of
Schooling Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.1 Introduction ...................................... 41
3.2 A Critique of Past Empirical Work .................. 41
3.3 A Model of Schooling Attainment and the
Accumulation of Human Capital . . . . . . . . . . . . . . . . . . . . 44
3.4 Empirical Implementation . . . . . . . . . . . . . . . . . . . . . . . . . 58
v
vi Contents
3.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Appendix 3.1: A Dynamic Model of School Attainment .... 70
Appendix 3.2: Selectivity Correction Terms . . . . . . . . . . . . . . 92
4. The Impact of Investments in School Quality
on Cognitive Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
4.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
4.2 Education in Ghana and the GLSS Data . . . . . . . . . . . . . 100
4.3 Applying the Estimation Procedure to the
GLSS Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
4.4 Estimation Results for Middle Schools in Ghana . . . . . 113
4.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Appendix 4.1: Description of the Tests Used ............ 155
Appendix 4.2: Additional Estimation Results . . . . . . . . . . . . 158
Part III: Cognitive Skills, Incomes and Rates of
Return to School Quality Investments
5. The Impact of Cognitive Skills on Wages ............... 169
5.1 Introduction ..................................... 169
5.2 Data and Estimation Strategy . . . . . . . . . . . . . . . . . . . . . . 170
5.3 Empirical Results of the Determinants of
Wages in Ghana ................................. 174
5.4 Estimates of Returns to Improvements in
School Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
5.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
Appendix 5.1 Additional Estimation Results ............ 203
6. The Impact of Schooling and Cognitive Skills on Income
from Non-Farm Self-Employment
by Wim P.M. Vijverberg ............................... 206
6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
6.2 Income from Household Non-Farm Enterprises
and the Role of Education . . . . . . . . . . . . . . . . . . . . . . . . . 207
6.3 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
6.4 The Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
6.5 Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218
Contents vii
6.6 Concluding Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
Appendix 6.1: Additional Estimation Results Using
Alternative Specifications of Enterprise Income . . . . . . 247
7. The Impact of Cognitive Skills on Income from Farming
by Dean Jolliffe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253
7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253
7.2 Descriptive Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254
7.3 Estimation Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259
7.4 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
7.5 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283
Appendix 7.1: Additional Estimation Results ........... 290
Part IV: Cognitive Skills and Non-Economic Activities
8. Child Health and Mothers' Education in Ghana
by Paul Glewwe and Jaikishan Desai . . . . . . . . . . . . . . . . . . . . . . 295
8.1 Introduction ..................................... 295
8.2 How Does Mothers' Education Affect
Child Health? ................................... 296
8.3 Data and Estimation Procedure . . . . . . . . . . . . . . . . . . . . 303
8.4 Empirical Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307
8.5 Impact of School Quality Improvements on
Child Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315
8.6 Conclusion ...................................... 317
Appendix 8.1: Regressions that Control for
Sample Selectivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321
9. Fertility and Women's Schooling in Ghana
by Raylynn Oliver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327
9.1 Introduction ..................................... 327
9.2 Women's Education and Fertility .................. 328
9.3 Data and Estimation .............................. 331
9.4 Empirical Results ................................ 334
9.5 Conclusion ...................................... 340
Appendix 9.1: First Stage Regression Results ............ 343
viii Contents
Part V: Findings and Recommendations
10. Summary of Findings and Recommendations
for Future Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347
10.1 Summary of Findings ............................ 347
10.2 Recommendations for Future Research . . . . . . . . . . . . 350
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354
Index .................................................. 365
List of Figures
1.1. Cost and benefit of education ............................ 7
2.1. Benefit of raising quality ............................... 27
2.2 Net benefit of higher quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.1. Timing of human capital investments without
school fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
3.2. Timing of human capital investments with school fees . . . . . 56
4.1. Sample of all children, 11-20, GLSS .................... 104
8.1. Determinants of child health .......................... 297
8.2. Z-scores by age of child . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306
ix