CLS Working Papers,
University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research

Abstract: This article analyzes the determinants of literacy and earnings in Ghana. It links literacy and earnings with a variety of factors, including age, gender, family educational background, distance to school, and income. Literacy and age are negatively correlated, suggesting that efforts at strengthening the supply and quality of basic education programs in recent years have been successful in raising literacy rates. Females are less literate than males, controlling for other factors. Parents' education is positively associated with literacy. Distance to the nearest primary school, residency in a rural area, and poverty affect literacy negatively. Functional literacy appears to be a prerequisite for entering the labor market, which may partly explain the lack of return to education other than middle school and technical/professional training. The policy implication of the study is that basic education and literacy programs should target females and poorer households, especially in rural areas.

Keywords: Functional literacy; earnings determinants; Ghana; Sub-Saharan Africa

JEL-codes: I21; J31; O12

41 pages, May 2000

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