Household social spending and welfare: empirical evidence from Ghana

Abstract

This study sought to examine the effect of household social spending on welfareinthelightofbothpresentandfuturepovertyanalysesusingthequantitative approach. Ghana Statistical Service’s Ghana Living Standard Survey (GLSS) fourth, fifth and sixth waves were used in the study. Final sample sizes of 5,556, 7,759 and 15,568 for the fourth, fifth and sixth rounds respectively were analysed. The study found in its first objective that very poor households benefited more in terms of welfare than non-poor households and that the difference in the effect of social spending widens between the poorest and other households, movingtowards higher levels of welfare. On the other hand, vulnerability to poverty estimates showed that, for all three rounds of the GLSS, all households suffer poverty in the future and it is severe for very poor households. Moreover, the study found that as households have higher inclination towards unilateral social support, the more it reduced welfare and thus resulted in rising vulnerability to expected poverty for all households. This was true for all objects of social support. Two key policy recommendations were made. First, informal sensitisation programmes by public agencies like the National Commission for Civic Education (NCCE)andNGOsshouldbeorganisedtocampaignagainstrisingsocialspending and its effect on future poverty, since formal education was found to have rather increased social spending. Second, the traditional authorities may formulate policies to set guidelines for the indicative costs of organising and running social events aimed at combating the rising social spending as has been done by the governments of Tajikistan and India.