Causes, Effects and Solutions to the Eradicating of Illiteracy

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Topics: Literacy
Is Functional Literacy a Prerequisite for Entering the Labor Market? An Analysis of the Determinants of Adult Literacy and Earnings in Ghana

Niels-Hugo Blunch and Dorte Verner

Working Paper 00-05 April 2000

Published by Centre for Labour Market and Social Research Universitetsparken, Building 350 8000Aarhus C, Denmark

Editor: Peder J. Pedersen Copyrights: Niels-Hugo Blunch and Dorte Verner

ISSN 0908-8962

Is Functional Literacy a Prerequisite for Entering the Labor Market? An Analysis of the Determinants of Adult Literacy and Earnings in Ghana

Niels-Hugo Blunch
The George Washington University and World Bank

Dorte Verner
World Bank

JEL Classifications: I21, J31, O12 Keywords: functional literacy, earnings determinants, Ghana, Sub-Saharan Africa

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.

We would like to thank Rosemary Bellew and Helena Ribe for invaluable support. We are also indebted to Rocio Castro; Ronald Ehrenberg; Nicolai Kristensen; our discussant, Nabanita Datta Gupta; and the other

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