Household Social Spending And Welfare: Empirical Evidence From Ghana

This study sought to examine the effect of household social spending on welfare in the light of both present and future poverty analyses. Ghana Statistical Service's Ghana Living Standard Survey (GLSS) fourth, fifth and sixth waves were used in the study. Final sample sizes of 5,556, 7,759 and 15,568 for the fourth, fifth and sixth rounds respectively were analysed. The study found in its first objective that very poor households benefited more in terms of welfare than nonpoor households and that the difference in the effect of social spending widens between the poorest and other households, moving towards higher levels of welfare. On the other hand, vulnerability to poverty estimates showed that, for all three rounds of the GLSS, all households suffer poverty in the future and it is severe for very poor households. Moreover, the study found that as households have higher inclination towards unilateral social support, the more it reduced welfare and thus resulted in rising vulnerability to expected poverty for all households. This was true for all objects of social support. At the end of the study, three policy recommendations were made. First, informal sensitisation programmes by public agencies like the National Commission for Civic Education (NCCE) and NGOs should be organised to campaign against rising social spending and its effect on future poverty, since formal education was found to have rather increased social spending. Second, the Government of Ghana could make cash transfers to poor households to relief them of the burden of poverty arising out of social spending, just as it does through its Livelihood Empowerment Against Poverty (LEAP), like the Scottish Government does through its Social Fund Funeral Payment (SFFP). Lastly, the government and local authorities may formulate policies to set guidelines for the indicative costs of organising and running social events aimed at combating the rising social spending as has been done in Tajikistan and India.