Simulating the Impact of the Global Economic Crisis and Policy Responses on Children in Ghana

PEP-MPIA Working Paper No. 2010-16

39 Pages Posted: 14 Apr 2011 Last revised: 11 Jul 2018

See all articles by Theodore Antwi-Asare

Theodore Antwi-Asare

affiliation not provided to SSRN

Edgar Francis Cooke

Ashesi University

Daniel Kwabena Twerefou

affiliation not provided to SSRN

John Cockburn

Partnership for Economic Policy (PEP); Université Laval; Partnership for Economic Policy (PEP)

Ismael Fofana

Université Laval - Département d'Économique

Luca Tiberti

Université Laval; Partnership for Economic Policy (PEP)

Date Written: September 1, 2010

Abstract

Like many countries in sub-Saharan Africa, Ghana is experiencing the impact of the global crisis and the uncertain economic outlook. Indeed, as Ghana’s economy is among the most open in Africa, it is expected that the country has been and will continue to be severely affected by the crisis, although strong export prices of its main exports (gold and cocoa) may at least partially counteract the effects associated with the crisis.

The main goal of this paper is to understand the potential impacts of the 2008/9 global crisis on different dimensions of child poverty (monetary, hunger, school participation, child labour and access to health services) in Ghana and to support the policy-maker in designing the most appropriate policy response to counteract the negative effects of the crisis. As timely data are not available, a combined macro-micro economic model to predict the impact of the global crisis on children was developed.

Simulations suggest that the financial crisis would increase monetary poverty and hunger across all regions of Ghana, eroding many of the gains made over the past few years. Indeed, in comparison with the year preceding the crisis, instead of a reduction of four percentage points in child monetary poverty in 2011 predicted in the absence of crisis, the simulations indicate a 6.6 percentage point increase, with a continuous increasing pattern over the period of study. The global crisis is also predicted to severely deepen hunger among children, which is simulated to increase up to 6.6 percentage points in 2011 beginning with a sharp increase already in 2009. For both monetary poverty and hunger, the impact of the crisis differs across all regions, with the Eastern, Volta and Greater Accra regions predicted to be the most affected. Children’s participation in schooling and labour, as well as their access to health services, are forecast to be much less affected by the crisis, although it is found to reverse predicted increases in enrolment and health access (with substitution toward more modern types of health services) and forecasted reductions in child labour.

Finally, alternative policy options have been simulated: a cash transfer programme targeted to poor children is found to be generally more effective in protecting children than food subsidies. Indeed, with a total budget equivalent to 1% of 2008 GDP, a cash transfer - equivalent to an individual annual amount of 19.8 Cedis - would cut the predicted increase in monetary poverty by over two percentage points in 2011.

Although Ghana might be in a position to rapidly implement a cash transfer programme building on the existing Livelihood Empowerment against Poverty (LEAP) programme, other interventions (or mix of policies) might be more cost-effective in the short run. A combination of a universal or regionally targeted cash transfer programmes for children aged 0 to 5 years old, together with a school-feeding programme in poorer regions, might represent an effective way to intervene quickly to improve child well-being.

Keywords: Global economic crisis, child poverty, hunger, education, child labour, health, West and Central Africa, Ghana, social protection

JEL Classification: D58, H31, I18, I21, I32

Suggested Citation

Antwi-Asare, Theodore and Cooke, Edgar Francis and Twerefou, Daniel Kwabena and Cockburn, John and Fofana, Ismael and Tiberti, Luca, Simulating the Impact of the Global Economic Crisis and Policy Responses on Children in Ghana (September 1, 2010). PEP-MPIA Working Paper No. 2010-16. Available at SSRN: https://ssrn.com/abstract=1807302 or http://dx.doi.org/10.2139/ssrn.1807302

Theodore Antwi-Asare (Contact Author)

affiliation not provided to SSRN ( email )

Edgar Francis Cooke

Ashesi University ( email )

1 University Avenue
Berekuso, Eastern Region
Ghana

Daniel Kwabena Twerefou

affiliation not provided to SSRN ( email )

John Cockburn

Partnership for Economic Policy (PEP) ( email )

P.O. Box 30772-00100
ICIPE - Duduville Campus, Kasarani
Nairobi
Kenya

Université Laval ( email )

Dept. of Economics
Québec, Quebec G1V 0A6
Canada

Partnership for Economic Policy (PEP) ( email )

Duduville Campus, Kasarani
P.O. Box 30772-00100
Nairobi
Kenya

Ismael Fofana

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada

Luca Tiberti

Université Laval ( email )

2214 Pavillon J-A. DeSeve
Quebec, Quebec G1K 7P4
Canada

Partnership for Economic Policy (PEP)

P.O. Box 30772-00100
ICIPE - Duduville Campus, Kasarani
Nairobi
Kenya

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