Inequality and Returns to Education in Ghana

Abstract

The study investigated: 1) the effect of infrastructural inequality on academic performance in Ghana; 2) the effect of education inequality on labour returns in Ghana; 3) the effect of gender inequality on labour returns in Ghana and; 4) the moderating role of culture in the relationship between gender inequality and labour returns. Firstly, based on Education Statistics (2018), ANOVA was used to estimate whether district-level academic performance differs at various distributions of infrastructure. The study further assessed the relationship between infrastructure inequality measured by “Infrastructure Quintiles” and academic performance using the Dynamic General Methods of Moments technique. It found that difference in district-level academic performance in Ghana is conditioned on infrastructure inequality. Secondly, based on a generated education Gini, a Heckman estimation technique and quantile regression, the study assessed the effect of education inequality on labour returns using the last two rounds of the Ghana Living Standard Surveys (GLSS 6 and 7). It was observed that education inequality and earnings were negatively related. It suggests that education inequality reduces wages by 6.25%. Lastly, using GLSS 6 and 7, the study examined whether discriminations, sticky floors and glass ceiling exist in the labour market of Ghana, from the perspective of gender differences, while considering the moderating role of culture. The results showed a mean wage of 8.1 and 7.6 for males and females respectively, representing about 6 percent wage differential. The results support the existence of wage discrimination against women across all wage distributions and the assertion that individualism moderates wage discrimination. There is evidence of the presence of sticky floors and glass ceiling in the labour market of Ghana. It is recommended that the government of Ghana pursue policies aimed at bridging the education infrastructure gap and accelerating equity in male-female education towards improved academic performance, fair wage returns and sustainable development.