PurposeThe objective of this paper is to examine the effect of spending one extra year in high sc... more PurposeThe objective of this paper is to examine the effect of spending one extra year in high school on early marriage and childbirth.Design/methodology/approachThe study takes advantage of the education reform in 2007 that extended the years of high school education by one to conduct a quasi experiment. The marriage and fertility outcomes of women who completed a four-year senior high school education are compared to those who completed a three-year senior high school education.FindingsThe findings from the study indicate that the one-year extension in high school education led to a 4.75 percentage point reduction in the probability of ever marrying by age 27 and a 6.7 percentage point reduction in the probability of ever given birth. The authors demonstrate that the extension of the duration of high school education by one year has a heterogeneous effect, as it reduced the fertility and marriage outcomes of rural girls more than urban girls. The study reveals opportunity costs an...
This paper uses the latest Tanzania labour force survey?the Integrated Labour Force Survey?and a ... more This paper uses the latest Tanzania labour force survey?the Integrated Labour Force Survey?and a censored bivariate probit model to analyse gender differences in labour force participation and gender bias in formal wage employment in urban Tanzania. Our findings indicate that, compared to men, women are less likely to participate in the labour market and less likely to get formal wage employment, suggesting the existence of gender bias in the labour market in urban areas of Tanzania.
This paper considers optimal linear income tax policy in a dynamic general equilibrium overlappin... more This paper considers optimal linear income tax policy in a dynamic general equilibrium overlapping generations model of retirement savings and offspring’s educational investment in an economy populated by altruistic agents. The model captures salient features of developing economies with two production sectors, formal and informal. The formal sector employs both capital and labor with taxation of factor incomes, while only labor is employed in the informal sector where wages are not taxed. There are two groups of workers differentiated by skill-type : skilled and unskilled. Skilltype of an agent is influenced by human capital investment undertaken by a parent. Both non-redistributive and redistributive optimal policies are quantitatively characterized in a model calibrated to the Ghanaian economy where 88% of workers are in the informal sector. Optimal income taxation requires high capital income tax relative to labor income tax ranging from 29% in the case of non-redistributive pol...
PurposeThe purpose of this paper is to examine the effects of school attendance on learning and c... more PurposeThe purpose of this paper is to examine the effects of school attendance on learning and child labour in Ghana.Design/methodology/approachThe paper uses a nationally representative sample of household and individual data in 2005/06 and 2011/12 for the analysis. Regression discontinuity, the capitation grant in 2005 as exogenous, is used to estimate the impact of school attendance on child labour and learning outcomes.FindingsThe study found that children who were exposed to the capitation grant spent more hours in school and were more likely to enrol in primary school. School attendance was found to increase the likelihood to read and write a standardised test in English. Also, the improvement in children’s school attendance was found to enhance the likelihood of performing a written calculation. The authors could not find any evidence that school attendance affected child labour.Originality/valueThis research is the first causality analysis in sub-Saharan Africa that uses a ...
The wage of an individual is observed only when he/she is employed. However, getting employment r... more The wage of an individual is observed only when he/she is employed. However, getting employment requires two decisions. First, an individual has to decide to participate in the labour market, and second, an employer must decide to hire that individual. Since female labour market participation often differs from that of men, and employers’ decisions to hire may also be influenced by gender, it is appropriate to account for this double selection process. This study uses the latest household survey in Ghana to estimate gender wage gaps by correcting for this double selection process. We find that the average total gender wage gap is positive and significant irrespective of the sample selection correction method used. Our results indicate that women on average receive lower wages than men. Irrespective of the type of selection method used, our findings suggest that almost all the wage gap is a result of differences in returns, with only a small part coming from differences in observable...
In this paper we develop a life cycle model to examine welfare and savings impact of a government... more In this paper we develop a life cycle model to examine welfare and savings impact of a government sponsored matching contributions proposal on voluntary pension scheme for informal workers in developing countries. Our setup for the analysis consists of overlapping generations of 60-period lived heterogeneous individuals facing mortality risk and individual income risk emanating from employment and health status uncertainties. We find that introduction of matching contributions to informal workers improves old age consumption by redistributing consumption from period of relatively high and stable income but subject to overspending to old age where income is low and uncertain. In addition, targeted matching contributions to informal workers redistribute income from high income formal workers with lower propensity save to the low income but higher propensity to save informal sector workers. The redistribution however enhances savings of informal workers unlike redistribution for social...
PurposeThe objective of this paper is to examine the effect of spending one extra year in high sc... more PurposeThe objective of this paper is to examine the effect of spending one extra year in high school on early marriage and childbirth.Design/methodology/approachThe study takes advantage of the education reform in 2007 that extended the years of high school education by one to conduct a quasi experiment. The marriage and fertility outcomes of women who completed a four-year senior high school education are compared to those who completed a three-year senior high school education.FindingsThe findings from the study indicate that the one-year extension in high school education led to a 4.75 percentage point reduction in the probability of ever marrying by age 27 and a 6.7 percentage point reduction in the probability of ever given birth. The authors demonstrate that the extension of the duration of high school education by one year has a heterogeneous effect, as it reduced the fertility and marriage outcomes of rural girls more than urban girls. The study reveals opportunity costs an...
This paper uses the latest Tanzania labour force survey?the Integrated Labour Force Survey?and a ... more This paper uses the latest Tanzania labour force survey?the Integrated Labour Force Survey?and a censored bivariate probit model to analyse gender differences in labour force participation and gender bias in formal wage employment in urban Tanzania. Our findings indicate that, compared to men, women are less likely to participate in the labour market and less likely to get formal wage employment, suggesting the existence of gender bias in the labour market in urban areas of Tanzania.
This paper considers optimal linear income tax policy in a dynamic general equilibrium overlappin... more This paper considers optimal linear income tax policy in a dynamic general equilibrium overlapping generations model of retirement savings and offspring’s educational investment in an economy populated by altruistic agents. The model captures salient features of developing economies with two production sectors, formal and informal. The formal sector employs both capital and labor with taxation of factor incomes, while only labor is employed in the informal sector where wages are not taxed. There are two groups of workers differentiated by skill-type : skilled and unskilled. Skilltype of an agent is influenced by human capital investment undertaken by a parent. Both non-redistributive and redistributive optimal policies are quantitatively characterized in a model calibrated to the Ghanaian economy where 88% of workers are in the informal sector. Optimal income taxation requires high capital income tax relative to labor income tax ranging from 29% in the case of non-redistributive pol...
PurposeThe purpose of this paper is to examine the effects of school attendance on learning and c... more PurposeThe purpose of this paper is to examine the effects of school attendance on learning and child labour in Ghana.Design/methodology/approachThe paper uses a nationally representative sample of household and individual data in 2005/06 and 2011/12 for the analysis. Regression discontinuity, the capitation grant in 2005 as exogenous, is used to estimate the impact of school attendance on child labour and learning outcomes.FindingsThe study found that children who were exposed to the capitation grant spent more hours in school and were more likely to enrol in primary school. School attendance was found to increase the likelihood to read and write a standardised test in English. Also, the improvement in children’s school attendance was found to enhance the likelihood of performing a written calculation. The authors could not find any evidence that school attendance affected child labour.Originality/valueThis research is the first causality analysis in sub-Saharan Africa that uses a ...
The wage of an individual is observed only when he/she is employed. However, getting employment r... more The wage of an individual is observed only when he/she is employed. However, getting employment requires two decisions. First, an individual has to decide to participate in the labour market, and second, an employer must decide to hire that individual. Since female labour market participation often differs from that of men, and employers’ decisions to hire may also be influenced by gender, it is appropriate to account for this double selection process. This study uses the latest household survey in Ghana to estimate gender wage gaps by correcting for this double selection process. We find that the average total gender wage gap is positive and significant irrespective of the sample selection correction method used. Our results indicate that women on average receive lower wages than men. Irrespective of the type of selection method used, our findings suggest that almost all the wage gap is a result of differences in returns, with only a small part coming from differences in observable...
In this paper we develop a life cycle model to examine welfare and savings impact of a government... more In this paper we develop a life cycle model to examine welfare and savings impact of a government sponsored matching contributions proposal on voluntary pension scheme for informal workers in developing countries. Our setup for the analysis consists of overlapping generations of 60-period lived heterogeneous individuals facing mortality risk and individual income risk emanating from employment and health status uncertainties. We find that introduction of matching contributions to informal workers improves old age consumption by redistributing consumption from period of relatively high and stable income but subject to overspending to old age where income is low and uncertain. In addition, targeted matching contributions to informal workers redistribute income from high income formal workers with lower propensity save to the low income but higher propensity to save informal sector workers. The redistribution however enhances savings of informal workers unlike redistribution for social...
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