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ERIC Number: ED356118
Record Type: Non-Journal
Publication Date: 1992
Pages: 51
Abstractor: N/A
Reference Count: N/A
ISBN: ISBN-0-8213-2321-0
ISSN: ISSN-0253-4517
Investment in Human Capital. Schooling Supply Constraints in Rural Ghana.
Lavy, Victor
This paper hypothesizes that the cost differential between primary school and middle or secondary schooling will affect household decisions to invest in any one schooling level in Ghana. Human capital investment is usually modeled in an intertemporal optimization framework in which households or individuals maximize the present value of life-time utility. The main cost emphasized in these models is foregone earnings while in school. Direct costs such as user fees and travel costs are given much less attention. In many developing countries, however, direct costs such as travel expenses can be an important component in household educational decisions. This paper introduces into the Ben-Porath/Heckman model a convex cost function of schooling, and analyzes its implications for school attendance and attainment. Data were drawn from a survey of 1,902 primary school age children in Ghana. The empirical work confirms the prediction of the theoretical model: the cost of advanced levels of education influences primary schooling decisions. If the direct cost of enrollment in middle or secondary schools is much higher than for primary schools, the households reduce investment in primary education. This may be the case because completion of several years of schooling or even a primary school diploma does not lead to the accumulation of any significant amount of human capital; the market consequently treats this level of schooling as no schooling. Thus, the supply constraints on middle and secondary education are at least as important as the supply of primary schools in holding down enrollment rates and causing students to drop out of the education system early. This document contains numerous tables throughout the text and in the appendix. (KS)
Distribution Unit, Office of the Publisher, Department F, The World Bank, 1818 H Street, N.W., Washington, DC 20433, (Stock No. 12321: $6.95).
Publication Type: Reports - Research
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: World Bank, Washington, DC.
Identifiers - Location: Ghana