Annual Household Budget Share in Formal Education Expenditure Using the Ghana Living Standards Survey Round Six Data: A Micro-Level Statistical Investigation

Abstract

Using household-level data from the Ghana Living Standards Survey Round Six, this paper focused on examining factors that determine annual household expenditure on formal education in Ghana, using the annual share of household budget in total education expenditure as the dependent variable. The study established that households in Ghana spend an average of 5.6 percent of their annual income on basic education, and the estimated ordinary least squares (OLS) effect shows that rural households spend 6.7 percent less on education than urban households in Ghana. Policy wise, the central government of Ghana must take measures to ensure that household spending on basic education is reduced more and concerted efforts purposefully upgrading infrastructure and human resources in rural areas to a much level comparable to that in urban areas, and annual rural household education expenditure would also see a tangible increase, ceteris paribus, in Ghana.