Effects of Remittances on Child Poverty in Ghana

Abstract

Assessing poverty at the level of the child helps to identify children who are at risk of prolonged or temporal deprivation. Scholarly works on how remittances affect various welfare indicators have been increasing lately. However, little attention has been given to how child poverty responds to remittances. The study examines the effect of remittances on child poverty using round seven of the Ghana Living Standard Survey. Specifically, the paper examines the amount of remittances needed to reduce child poverty and which dimensions of child poverty is most sensitive to remittances. Using Propensity Score Matching and Two Stage Least Square techniques, the study concludes on a negative and significant link between remittances and child poverty, hence, making children in remittance receiving households better off as compared to those who are not. For households that received food remittance, child poverty levels reduced by 3.4 percentage points whereas households that acknowledged receipt of cash remittance had child poverty levels reducing by 3.2 percentage points. With regards to which dimension is most sensitive to remittances, the findings confirm that child education is the most sensitive to food remittances and health dimension is most sensitive to cash remittances. Going forward, the Ministry of Gender, Children and Social Protection could be tasked to identify and direct government to the provision of education, health and sanitation facilities to include areas that are lacking.