Poverty as a Rural Phenomenon in Ghana: The role of remittance income and child dependency

Author(s):

Gloria Afful-Mensah^* and Richard Kwabi Ayisi¹

gafful-mensah@ug.edu.gh / rkayisi@ug.edu.gh
2024-08-01 04:32:00

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Abstract

Ghana's poverty profile shows substantial variations across localities, yet, it is not clear how the determinants vary across these localities. Beyond that, three issues remain puzzling: large household size in rural areas may be a form of resource pooling if there are few child dependents in households; remittance income may reduce poverty likelihood and/or serve as a coping strategy for households; and given that agriculture is the main source of livelihood in rural Ghana, the locality of residence may be crucial in determining all-year-round agricultural activities and poverty likelihoods. To understand the above issues, we test two main hypotheses: that the probability of being poor will be lower in households that receive remittances; and in households with lower child dependency level. First, we use a parametric model to estimate the correlates of poverty in a pooled sample, then we relax the functionality assumption by adopting a non-parametric model to quantify the effects of our key covariates. The results show that while the probability of being poor declines with increase in remittance income, the transfer needs to be at least GH?800. The likelihood of being poor increases with the number of child dependents in households. The results further reveal the poverty determinants to be heterogeneous within themselves and across localities. Our findings highlight the importance of remittances in households’ livelihood strategies and the need for strict and enforceable fertility policies to reduce the burden of child dependency in households.

Keywords
Poverty; determinants; remittance income; child dependency; Ghana.

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