Human resource development and economic growth : Ghana in the next two decades

PHREE Background Paper Series Document No. PHREE/92/57 HUMAN RESOURCE DEVELOPMENT AND ECONOMIC GROWTH: GHANA IN THE NEXT TWO DECADES By Elizabeth M. King Paul Glewwe Wim Alberts Hi1 C'hG-F1CIlE G',f'Y RePort Nc. i10 " '9-9? H T y p: ( EC KING, !T.LiZ/' X '9 / / 'iARE DATF>: F= 199?I :e9 u Education and Employment Division Population and Human Resources Department The World Bank June 30, 1992 This publication series serves as an outlet for background products from th, ongoing work program of policy research and analysis of the Educabon and Employment Dihison In the Population and Human Resources Department of the World Bank. The wiews expressed are those of the author(s), and should nor be attibuted to the World Bank.  wThe heart of the whole process of industrialization and economic development is intellectual; it consists In the acquisition and application of a corpus of knowledge concerning technique, that is, ways of doing things." (David Landes, 1980) 0... health and strength, physical, mental, and moral ... are the basis of Ineustrial wealth; while conversely the chief importance of material wealth lies in the fact that when wisely used, it increases the health and strength, physical, mental, and moral, of the human race." (Alfred Marshall, 1890) The authors wish to thank David Berk, Nicholas Bennett, Ajay Chhibber, Chad Leechor, Patience Stephens, and other members of the Ghana Accelerated Growth Study team for their comments on earlier drafts; and Josephine Woo for the projections of enrollments and costs. Errors are the sole responsibility of the authors. Maria Felix and Selina Khan provided excellent secretarial support.  Abbtract Human resources are a country's wealth. A longstanding commitment to education and health has been key to economic growth and development In countries worldwide, and it Is in this field that Ghana will need to make the biggest strides to *catch up" If it is to break into the league of fast- growing economies. While human capital does not guarantee fast growth, even with the best of policies, Ghana cannot achieve the rapid growth seen elsewhere i it does not invest more in broad-based human capital. The paper summarizes some lessons from the experiences of the newly industrializing countries (NICs) of East Asia regarding the contribution of investments in human capital to accelerated and sustainable economic growth. It reviews Ghana's past performance in education and health, and discusses the resources and policies required for achieving further progress in the next two decades. One major conclusion is that Ghana will have to continue to give the highest priority to making further investments in both basic education and primary health. When compared with the NiCs at the time those countries started on the path of rapid growth, Ghana lags behind most in these basic indicators. Without the solid foundation of universal literacy and numeracy and an efficient primary health care system to build on, more costly investments in higher education and tertiary care are likely to be both wasteful and inequitable. The paper concludes with a reminder that broader policies related to population growth and to the efficiency of the labor market are also important for successful human resource investments.  Table of Contents The Contribution of Human Resources to Development .....1................... 1 An Intemational Perspective .1 Education's Effect on Worker Productivity and Growth in Ghana. 6 Health and Nutrition Status, Productivity, and Growth in Ghana. 9 Hurnan Resources Development In Ghana .11 Education .11 Heatlt and Nutrition .18 Looking to 2010: Goals and Policies for Human Resource Development .24 Education .25 Health and Nutrition .39 An Enabling Policy Environment ...................... 45 References 50 Boxes Box. 5 Box2 .34 Box3. 46 Tables Tablel . 4 Table 2 .9 Table 3 ................ 10 Table 4 .12 Table 5 .13 Table 6 .15 Table 7 .20 Table 8 .21 Table 9 .22 Table 10 .... 26 Table 1. 28 Table 12 .32 Table 13 .33 Table 14 .36 Table 15 .37 Table 16 .42 Table 17 .....,..... 43 Table 18 .44  Figures Figure 1 ........... 14 Figure 2 ........... 15 Figure 3 ........... 16 Figure 4 ............ 17 Figure 5 ........... 19 Figure 6 ........... ..................................... 48 Appendix Figure 1 ........... 49  1. The Contribution of Human Resources to Development 1. Human resources are a country's wealth, and it is people, not machines or money, that make economies grow. A longstanding commitment to education and health has been key to economic growth and development in countries worldwide, and it is in this field that Ghana will need to make the biggest strides to *catch up i it Is to break into the league of fast-growing economies. While human capital does not guarantee fast growth, even with the best of policies Ghana cannot achieve the rapid growth seen elsewhere N it does not invest more In human capital. 2. This paper begins with a brief summary of lessons from selected countries worldwide regarding the contribution of human resources to economic growth. It then reviews studies pertaining to Ghana's own experience: what have been the effects of improvements in education levels and health status on productivity and development. Section 11 assesses the past performance of Ghana with respect to building its human resources, highlighting the key issues of provision of and access to education, health and nutrition services. Section III discusses targets for the future, and the resources and policies required for achieving these goals. Section IV concludes with a reminderthatfutui numan resource development in Ghana depends not only on policies adopted by the education and health ministries, but also on broader policies affecting labor markets, technological change, industrial structure, and population growth. A. An Intemational Perspective 3. Development history shows that, whether at initial or higher levels of Industrial development, general and versatile education is the best strategy. A dynamic industrial environment demands that workers be able to perform new and multiple skills. But the precise links between particular types of education and specffic levels or forms of industrialization are not always easy to trace, and many past govemment efforts to centralize manpower planning have failed. In an economy experiencing dramatic changeo, Including rapid innovation, a broad base of general scientific and engineering skills through basic education is more critical for success than specialized technical education. Even when the rise of more complex industries increases the need for specific highly technical skills, this need is most efficiently and quickly met through on-the-job training and continuous Ore-toolingu through short postschool training courses. 1  4. General education pays for itself in the long-run; however immediately irrelevant it Is to specific jobs, it enhances receptivity to knowledge and the capacity to learn. It thus improves the cost- effectiveness of later training, a point now increasingly acknowiedged by industrialists and employers (White 1988). This is riot to say that secondary and higher education can be ignored; but increases in postprimary education typically go together with primary education, while education of the elst without mass education is unlikely to engender economic growth (Easterlin 1980). 5. In the countries that followed Great Britain's industrial revolution, the time required for major changes in the quality of life shortened steadily over the cen'uries (World Bank 1991). The growth of knowledge and technological inruovation quickened this pace of progress, and has allowed late starters to catch up. It Is no surprise then that education should be a key factor In economic growth. Indeed, it appears that the wide availability of primary education was a precursor to the onset of modern economic growth in many countries. In Germany and the United States, there were more than 1,500 children in primary school per 10,000 of population in 1820 (Easterlin 1980). iUteracy too was already very high when industrialization began in the mid- and late 1800s in the Scandinavian countries. 6. In Asia, Japan's rise as a major economic power has been attributed, in part, to its highly educated and education-conscious ,- "ulation (Morishima 1982). At the beginning of the Meiji era in 1868, literacy was only 15 percent, but by 1872 a universal and compulsory system of primary education had been introduced and the foundations for secondary education had been laid. Primary school attendance grew from less than 30 percent in 1873 to more than 90 percent in 1907. The number of secondary schools expanded tenfold during the period 1885-1915. Since it would be years before Japan could develop a system of university education and research that could provide the technology it needed for modem industrial growth, serious government efforts were made to import technology from Westem countries through technical assistance, education programs abroad, and imported inputs. 7. Korea', relatively strong base of human capital in the early 1960s was key to its technological capability and the fast rise in its industrial output. Its accumulation of human capital started during the period 1910-45, with substantial on-th-job training and foreign technical assistance. Important education programs focusing on universal primary education and adult literacy were launched during the late 19409 and 1950s. In the 1960s, higher education was also greatly expanded, and many students were sent overseas for technical and advanced training (Pack and Westphal 1986). 8. Taiwan today has one of the most educated populations among developing countries, and is another goed example of a strong economy based on an educated and highly skilled labor force. As In 2  Japan and Korea, govemment policy focused first on universalizing primary and secondary education for the rapidly growing population In the two decades after the war. Free compulsory education was extended from six to nine years in 1968, and literacy rose from 58 percent in 1952 to more than 92 percent in 1987. Taiwan also expanded vocational training as a means to develop Its skilled workforce. Compared to selected countries, Taiwan's share of students enrolled in vocational training (3.4 percent in 1988) Is slightly higher than South Korea's, and much higher than Mexico's, Brazil's, Japan's, and Hong Kong's. A close link with industry was instrumental in ensuring that this training was responsive to skills demanded.' 9. In Sub-Saharan Africa, Mauritius' export performance has been exceptional. Its export boom is based on, among others, a strong indigenous entrepreneurial class, and a well-educated workforce (Lall 1990). The literacy level in Mauritius was 68% in 1970, which was more than double the average of 27%h in Sub Saharan Africa that year. In 1985 the average literacy level had risen to 83, with high rankings for both male (89) and female (77). Equally high enrollment rates underline the progress of the quality of the education system. 10. Kenya's economic performance has been much better than average among sub-Saharan African countries, and even in the difficult years of the 1980s Its GDP growth was 4.1 percent. By most indicators, Kenya's performance in education was not exceptional in the 1960s, but in the early 1970s, almost universal primary school enrollment was attained. Since that time secondary school enrollment has also increased dramatically. 11. Besides this historical evidence across countries, other empirical work corroborate the posHitve relationship betweer. education and economic growth. Research for the World Bank's 1991 World Development Report suggests that increasing the average amount of education of the labor force by one year, when this average is three years or less, raises aggregate real output by 9 percent. 12. A final set of evidence on the importance of education and economic growth are recent cross- country analyses. Several show that the education levels of the population are significantly and positively correlated with the rate of economic growth. A few disaggregate education by different levels of education. Barro (1991) examined primary and secondary education separately on a sample of 98 ' A close link between industry and vocational institutions has been a cornerstone of vocational training in Singapore, South Korea, and Taiwan (Dahlman and Sananikone 1990). Private sector participation has ensured a match-up of training skills with the changing demands of industry, and has helped alleviate the high costs of vocational and skill training that would been borne by the public sector. 3  countries and found that both were significantly and positively corralated with economic growth. Dollar (1991) included separata variables on primary, r -oondary and tertiary education, and aWo found growth to be slgnticantly correlated with primary and secondary education, but not witli teitiary education (Table 1). These findings suggest that, at least In the medium term, primary and secondary education are more Important for economic growth than post-secondary education. Table 1: Determinants of GDP Growth: Cross-Country Regression Analysis, 1960-85 Dependent variable: Average growth rate of per capita GDP, 1960-85 Constant 11.20 11.93 13.80 Primary Enrollment in O.u37 0.037 0.027 1960 (5.8A) (4.63) (2.48) Secondary Enrcliment 0.024 0.090 0.228 In 1960 (1.89) (2.47) (2.14) Tertiary Enrollment in -0.031 -0.090 -0.333 1960 (0.70) (0.73) (1.63) Index of Trade -0.019 -0.011 -0.007 Distortions (3.43) (1.47) (0.80) Variance In Trade -0.083 -0.061 -0.068 DistorUon Index (3.21) (1.66) (1.61) Rate of Investment 0.107 0.100 0.107 since 1960 (4.76) (3.13) (3.02) Logarithm of GDP In -1.59 -1.96 -2.30 1960 (6.28) (4.08) (4.12) R2 0.61 0.68 0.62 Sample Size 114 57 43 (All) (Low-income only) (African only) Note: Figures In parentheses are t-statistlcs. Source: Dollar (1991). 4  Box 1: What s et about eduostion that fosters economic growth? When education levels and wage rate are found to be signifiantly and positively correlated, is this because education Imparts workers with productive skills such as literacy and numeracy, because It screens workers by Inhorited ability for eamploysrs, or because employes pay workers according to the level of formal education regardless of thelr productvity? A recent World Bank study on two African economies has taken up this Issue. Knight and Sabot (19ri) examined priva'e sector urban workers in Kenya and Tanzania and found thIt tn_,r wages are highly correlated with their mathematics and reading skills. In contrast, their abstract thinl.ing ability (which should be closely tied to Innate ability) and their educational oredentials (measured by degrees) In general were not important determinants of there wages. Knight and Sabot conclude that education raises wages, and more generally, raises producthity, by raising the skills of wokers. 13. So far, our discussion has focused on education. One factor that has increased the potential benefits from investments in education and training and deserves as much attention are improvements In the life expectancy and health status of people. Better health and nutrition are desirable ends in themselves, but their impact on productivity and incomes cannot be ignored. Thanks to modem public heafth and medical technological advances, mortality rates have declined even in poor countries with large populations through measures such as mass immunization programs, water purification, application of pesticides, and better sewage systems. Average life expectancy at birth of males in industrial countries Increased by twenty-five to thirty years between 1880 and 1985. Similar improvements in life expectancy have been achieved more quickly and at lower levels of income in some developing countries since the 1940s (World Bank 1991). 14. Intemational evidence indicates that there are several pathways from good health and nutrition to economic growth. Perhaps the most obvious one is through improvements in the physical strength and endurance of workers. Nutritional studies have demonstrated this effect. In Sierra Leone, a 10- percent increase In the caloric intake of farm workers consuming 1,500 calories a day raised output by 5 percent (Strauss 1986). Similar results have been found among Kenyan road construction workers with a daily intake of 2,000 calories. A second pathway is through reductions in number of days ill and days absent trom work due to sickness. Household survey data from nine countries suggest that the economic effects of aduft illness may be substantial because of the resulting absences from work (King and others 1991). The potential Income loss due to illness in eight developing countries averages 2.14.5 percent 5  of yearly eamings oi workers. In addition, good health raises lifetime eamings by Increasing the number of years that adults work without the Illnesses generally associated with old age. 15. A fourth pathway which is more closely relatad to Investments in education Is the effects of health and nutrition on educability. Healthy chilcren may be able to learn relatively more in school, both because they are more attentive an:l because they have fewer absences due to disease. Lastly, good health, though iself not a free good, saves on resources devoted to curative health care; the net result may be savings on health expanditures. B. Education's Effect on Worker Productivity and Growth In Ghana 16. Recent evidence from Ghana shows a clear relationship between human capltal, as measured both by education and by cognitive skills (literacy and numeracy), and productivity. A recent study using the Ghana Living Standards Survey (GLSS2) data estimated the rates of return among private sector workers to be 3-7 percent, depending on the age of the person and region considered (Glewwe 1991).3 These estimates are rather low in comparison with the average rates found by Psacharopoulos (1985). However, the lower rates for Ghana were estimated for those areas and age cohorts which have the lowest quality of education. Thus, if the quality of education can be increased, the rate of return could be higher than 7 percent. Moreover, these are private rates of return to households, and the social rates of return could be higher. One conclusion of the study is that the quality of education in Ghana has been declining, a disturbing finding that is suggested even by other more casual evidence. This conclusion is based on the result that, controlling for grade completed, older population cohorts score higher on mathematics and reading tests than do younger cohorts. 17. Since agriculture employs a large proportion of Ghana's labor force, whether or not education Increases the productive efficiency of farm households is an Important issue. Worldwide evidence from 2The GLSS is a nationally representative random sample of 3,200 households. The first survey was conducted in 1987/88 and the second in 1988/89. Many of the analyses discussed in this paper are based on these databases. 3The impact of education on wages is commoniy used to measure the private rate of return to education. This approach is based on the well-known human capital model developed by Becker (1975) and Mincer (1974). Rates of return to education are calculated by assuming that higher wage rates of more educated persons reflect their higher productivity. 6  other countries suggests that it can.4 A study on Ghana found that average years of schooling M agricultural households does lead to higher levels of farm profits (Jolliffe 1991). These estimaites indicate that an Increase of one year in adult education will, on average, raise farm profits by almost 4 percent. In non-agricultural self-employment, there Is evidence also of a positive Impact ot education on houisehold enterprlse income (Vijverh-erg 1991a, 1991b). 18. The human capital model assumes that higher wages amorg persons wth higher education are caused by tholr greater productivity. Yet some may argue that other factors are at work; for example, ' ..er educated people may be more productive simply because they have more innate abiirty, not because they have more schooling. Others may argue that workers are paid on the basis of their formal schooling credentials; and not on the basis of their actual productivty. Yet each of the studies cited above support the human capital model as opposed to the other theories. This is because In each study a measure of abstract thinking which is highly correlated with innate ability, the score on the Raven's Progressive Matrices test, was examined and found not to explain wages, profits or income. Also, credentials matter in wage work, but it is only true in the govemment sector, not in the private sector (Glewwe 1991).5 19. What are the implications for Improved investments in human capital for growth in Ghana? A simple example using wage data gives an idea of the implications. Suppose that present schooling conditions imply that an additional year of schooling raises worker productivity by 5 percent (mathematically, this is Identical to the rate of return to schooling). If beginning in 1991 until 2000, each new labor forc; .ntrant has an additional year of schooling, compared to what would happen under the status quo, roughly 25-30 percent of the labor force would now be 5 percent more productive, which implies that total output would be up by about 1.25-1.5 percent (relative to the status quo). If each new labor force entrant had 2 additional years of schooling the increase in output would be 2.5-3 percent. Suppose that, in addition to Increasing the level of schooling of labor force entrants by 1 year, school quality were Improved so that these entrants were now 15 percent more productive (instead of 5 percent). Then total output would be 3.75 percent to 4.5 percent higher by the year 2000 (relative to the status quo). In fact, these estimates are probably on the low side because they do not account for any positive interactions between technological change and human capital. Finally, to present an optimistic scenario, 4See Jamison and Lau (1982) for a survey of studies in the 1970s. More recent studies include Jacoby (1990) and Newman and Gortler (1991) for Peru. 5Note that credentialism is generally irrelevant for agricultural or non-agricultural self-employment, since it is not based on an employer-employee relationship. 7  suppose that new labor force entrants had 3 additional years of education, and that each year of education made them 20 percent more productive. By the year 2000 the increase in output would be 18-22 percent higher. Note finally that as time passed, this rate would Increase because a larger share of the work force will be made up of the new labor market entrants. 20. Education not only raises incomes but also Influences health, nutritional status, and family size. A recent study by Ainsworth and Nyamete (1992) examines empirically the relationship between female schooling and two behaviors - cumulative fertility and contraceptive use in 10 Sub Saharan African countries. In analyzing the 1988 Demographic and Health Survey (DHS) for Ghana, they found the number of years of female schooling to be positively correlated with lower cumulative fertility and higher current and ever contraceptive use (Table 2). Secondary female schooling is strongly negatively associated with fertility. and the negative association increases as the level of schooling rises. Primary female schooling has no relation with fertility in Ghana, but in the regressions on contraceptive use, primary female schooling has a highly significant positive relation with current and ever use of contraception. Benefo anid Schultz (1992) found similar relations between female education and fertility. In addition they found household expenditures, a proxy for permanent income, to be negatively related to fertility. This suggests that the negative effect of household income on fertility in Ghana may contribute to a decline In the future level of fertility, if there is a period of sustained economic growth in the country. 21. Two studies on the nutritional status of children found mixed evidence regarding the impact of mother's and father's education on child nutritional status. Alderman (1990a) found that mother's education has a positive but Insignificant impact on child height for age (an indicator of stunting), while father's education has a negative, though again usually insignificant, impact. Thomas (1990) found, for urban male and female children separately, positive effects of mother's education on the height of female children but no significant effect on male children. Father's education has no effect on male children but significantly negative impact on female children. Although both studies cast some doubt on the magnitude of the impact of parents' education on the health of their children, studies on other countries have found strong evidence of this.6 Further analysis on education's effort on health, nutritional status and family size is warranted for Ghana. 'A study of the determinants of chronic malnutrition in the Philippines found that mother's education and the availability of safe drinking water explained nutritional differences among children, while household income did not (Barrera 1990). Moreover, so important is the influence of mother's education on child mortality that education mitigates the impact of the absence of medical facilities in the community. Studies on Nicaragua, Nigeria and India report similar findings. 8  Table 2: The Relationship between Women's Schooling and Children Ever Bom, and Women's Schooling and Use of Modem Contraceptive in Ghana, 1988. Years of Pct w/no Schooling' 1-6 years2 7-10 years 11 + years Schooling Fertility: -1.596 National -.0775 -ns3 -.447 Urban -.0891 +ns -.449 -1.448 26.75 Rural -.0673 -ns -.393 -1.764 46.85 Age 15-24 -.0424 -ns -.233 -.815 25.12 25-35 -.0845 -ns -.470 -1.670 37.87 35+ -.1040 -ns .642 -2.205 62.13 _ontraceptives: .515 .577 .897 Current Use .0620 Ever Use .1260 .746 1.101 1.785 Source: Ainsworth and Nyamete (1992) Notes: I) The coefficients in the first column can be interpreted as the effect on the number of children ever born of increasing female schooling by one year. But the distribution of highest grade completed in Ghana indicates peaks at zero schooling and at 10 years, so that this effect is driven by the differences in behavior of those two groups of women. 2) Column 2-4 are dummy variables and thus indicate the effect on the number of children relative to the omitted category, no schooling. Other explanatory variables, include age, age squared, urban residence, region, ethnicity and religion. 3) Not significant C. Health and Nutriton Status, Productivity, and Growth In Ghana 22. Afthough there are very few studies that measure the impact of health and nutritional status on development In Ghana, evidence is available for several from other countries, both African and non- African, on the qualitative impact of improvements in health and nutritional status on worker productivity (see Over and others (1991) for a survey). Unfortunately, rigorous analysis is difficult because when one household member becomes less productive due to ill health, other members work harder to try to 9  maintain household income levels. Another difficulty lies In the fact the relationship between health and productivity Is a two-way street, thus complicating statistical estimation of the impact of the former on the latter. Further complicating the measurement of the effect of poor health is the fact that its effect on productivity is not instantaneous but builds up over time. 23. One recent study examines the impact of adult health on the wages, hours worked, and eamings of wage workers in Ghana (men and women separately) (Schultz and Tansel 1991). Despite careful econometric techniques employed, very litle was found in terms of the effects of health on employment. The one statistically significant finding is that men wth poorer health tended to work fewer hours, but this effect did not show up significantly in the estimate of the impact of poor health on overall earnings. A major problem faced by studies such as this is that self-reported days of ill health may be biased indicators of actual health status. The cost of collecting better data, however, can be prohibitive. Table 3: Illness and Injury Among Adults and Inactive Days Due to Illness: Ghana (adults aged 20-59) Male Female Total Sample % Days % Days % Days A. Percent ill or injured and average days ill last month All 42.6 8.0 48.0 7.8 45.6 7.9 Labor force 41.9 7.6 46.5 7.7 44.4 7.7 B. Percent and number of days inactive due to illness last month All 24.3 5.3 26.4 4.9 25.4 5.1 Labor force 24.9 4.9 27.6 4.8 26.4 4.8 Source: King, Rosenzweig, and Wang (1991). These results are based on Ghana iiving Standards Survey data, 1988/89. 24. One may still be able to get a rough idea of one economic cost of poor health: the value of absences from work due to ill health. One study found that 46 percent of adults aged 20-59 reported they were ill at least once In the four weeks prior to the date of Interview and 26 percent of those in the labor force had missed work as a result of illness or Injury (King and other s 1991) (Table 3). Those who 10  were ill reported being sick for a total of about eight days in the last month; sick workers reported losing about five days from work that month, or about one-quarter of their normal earnings. When these numbers are applied probabilistically to the total adult population, Illness and injury among workers can result in a potential income loss of 6.4 percent per month for the country. Although it is impossible to improve health so that absences never occur, this figure gives an idea of one kind of cost of ill health on worker productivity in Ghana. I. Human Resource Development In Ghana 25. Does Ghana now have the human resources required for a high growth path in the next two decades? Issues pertaining to Ghana's past performance in both education and health have been wrftten up extensively elsewhere (Govemment of Ghana 1992; World Bank 1989), so the discussion here will merely highlight a few points. A. Education 26. Historically, Ghana's performance In education has ranked high in comparison with its West African neighbors. Until the mid-1970s, the country enjoyed the reputation of having one of the most highly developed and efficient educational systems in Sub-Saharan Africa. However, the initial jump in enrollment rates and construction of new schools in the early 1960s was accompanied also by a lack of qualffied teachers, unequal distribution of facilities among schools, and weaknesses in administration and coordination of educational development (McWilliam and Kwamena-Poh 1975). With an eye to shoring up school quality, the Govemment raised its recurrent education budget up to an average of 24 percent of the total recurrent budget during the period 1971-1976 (Keith 1985). Compared to other West African countries which averaged 17 percent, this share seemed high, and initial Government efforts yielded higher enrollment rates, increased numbers of qualified teachers, and higher rates of literacy. 27. This allocation, however, did not survive the economic decline of the late 1970s and early 1980s. It was followed by a precipitous deterioration in the education system. Recurrent education expenditures (as a percentage of GDP) dropped from 6.4 percent in 1976 to 1 percent in 1983. In 1983, (real) public recurrent expenditure per student in primary education fell to U.S. $16, which is about 40 percent of its 1975 level and only 24 percent of its 1970 level (Table 4). Even larger proportional decreases occurred in per student expenditures at the upper levels. Since 98 and 91 percent of these allocations in primary and secondary education, respectively, were spent for teachers' salaries, meager resources were left for 11  instructional supplies and school maintenance. As public resources were being reduced, foreign exchange resources also were drying up, preventing the purchase of textbooks and other essential Instructional materials. Table 4: Public Education Expenditure per Student (in constant 1983 dollars) 1970 1975 1980 1983 Primary Pupil 66 41 21 16 Secondary 100 131 66 39 Student Tertiary Student - 3638 1195 619 Source: World Bank 1987, "Education in Sub-Saharan Africa," p. 141-143. 28. The economic crisis also led to a massive brain drain, exacerbating the decline in quality due to the squeeze on inputs. Qualified teachers at all levels fled the country, leaving higher level education understaffed and basic education with more untrained teachers. The education sector lost 4,000 trained teachers between 1976/77 and 1980/81 (Comia 1987). The sector was further weakened by sporadic planning based on inadequate information, by low motivation and morale, and by widespread misappropriation of funds. 29. In 1983, the Government once again undertook efforts to reverse the decline in the quality of the educational system and to promote the development of human capital for the long term. An Educational Reform Program was initiated for the purpose of reducing the length of pre-university education, improving pedagogic efficiency and raising the quality of education outcomes, containing and partially recovering costs, and improving sector management and budgeting procedures. To implement this reform program, the Govemment raised the share of its public recurrent budget devoted to education from 27 percent In 1984 to 36 percent in 1988, or as a percentage of GDP from 0.8 percent to 3.3 percent. In addition, it instituted important changes in the structure of public education expenditures, including a shift away from higher education towards basic education (Table 5). 12 .  Table 5: Ghana Budget Estimates by Type and Level of Education (cedis million, 1988 prices) Estimated Actual Projected Type and Level 1993 Primary 14,123 39.9 18,466 41.8 Middle/JSS 7,802 22.0 8,205 18.6 Senior Secondaryb 6,180 17.4 8,999 20.4 TechNocationalb 796 2.3 980 2.2 Teacher Training 1,065 3.0 987 2.2 Universityb 5,467 15.4 6,540 14.8 Total 35,433 100.0 44,177 100.0 a 1992-93 academic year. b Includes scholarship costs. Source: World Bank 1990 (Second Education Sector Adjustment Credit). 30. Today, enrollment ratios in secondary and tertiary education as a share of age group are about 40 and 2 percent, respectively. These numbers are lower than those currently prevailing In the Asian NiCs (or near-NICs) and middle-income countries as a whole, but compare quite favorably to the 1960s and 19709 when these countries were starting on the path of rapid growth (Figures 1 and 2). This is particularly noteworthy since Ghana's GDP per capita in 1989 (in 1980 constant U.S. dollars) was lower than those of the other countries, except Thailand's, in 1960. 31. But while Ghana appears to compare favorably with respect to secondary and higher education, it suffers from comparison with respect to primary school enrollments and literacy. The Asian NlCs, as well as Thailand and Malaysia, had all achieved universal primary education by the time they began their industrialization (Figure 3). Ghana, on the other hand, has a primary enrollment ratio lower than the ratio in several Afrcan countries, including Botswana, Kenya, Mauritius and Zimbabwe. 32. Enrollment figures give the quantity of inputs of students, but do not provide an accurate measure of the amount of leaming in school. Ghana's reported adult literacy level of about 55 percent is higher than the average in Africa, but it is low In comparison with literacy levels above 80 percent In Korea, Brazil 7Using purchasing-power-parity U. S. dollars instead, however, Ghana's GDP per capita was Icwer than Thailand's in 1960--$ 534 compared to $ 688. 13  and Thailand, and lags behind a few Sub-Saharan African countries too, Including Zimbabwe, Zambia, Kenya, Zaire, and Botswana. Moreover, Ghana's lteracy level is low In companson with the NICs in the 1960s when their economies were taking off. For example, the literacy rates in the fast-growing East Asian countries before their economic take-off were: Korea (1960), 70.6; Hong Kong (1960), 70.4; and Singapore (1970), 68.9. Even Malaysia and Thailand had higher literacy rates in 1970--58 and 78.6 percent, respectively. Figure 1 Ghana and Low-, Middle-, and High-Income Countries: Secondary Education Enrollment Ratios, 1960-1988 Gross enrollment rates 80 0 p 1960 1966 1970 1976 1980 1985 1988 Year Low-inoome -4- MIlddle-Inoom HlIgh-Inoome -E- Ghana Data Souroos World Bank Databaso 8Census-based estimates cited by UNESCO (1990) are available only for 1960 and 1970. In 1960, the literacy rate of the total population aged 6 and above was 27 percent; in 1970, the total population aged 15 and above was 31.2 percent literate. The UNESCO estimates and projections are 52.8 for 1985, 60.3 for 1990, and 73.6 percent in 2000. 14  Figure 2 Ghana and the NIC's Secondary Education, and GDP Per Capita, 1960-1988 Secondary Enrollm-nt Ratio 1460 1065 1070 1075 1080 185 1t988 - Ghana +- Hong Kong Korea + Malaysia -A Thailand Data Source: World Bank Database 33. In addition, the reported literacy rate of 55 percent was obtained by asking respondents if they had ever been to school. It is widely known that school artondance does not guarantee literacy (or numeracy). From the GLSS which fielded more specific questions, a much smaller literacy level emerges (see Table 6): In Accra, 70 percent of respondents could read and 63 percent could write; In rural areas, however, only 28 percent could read and 26 percent could write. The national figures then are only 35 and 32 for being able to read and write, respectively. In addition, only 48 percent could perform simple arithmetical functions. 15  Figure 3 Ghana and the NIC's Primary Education, 1960-1989 Primary Enrollmont Ratio 140 120 120t 100 100 0 8 ~~~~~~~~~~~~~~~~~~oo 4 K2o 20 0 1960 1965 1970 1976 1980 1l85 1989 Ghana -I- Hong Kong - Korea M Malaysia Thailand Data SourCe: World lank Database Table 6: Uteracy and Numeracy Rates in Ghana By Regior 'nd Sex (percent) Other All Accra Urban Rural Ghana Can Read 70.1 41.3 27.7 35.4 Can Write 63.3 38.3 25.5 32.5 Can do Arithmetic 78.1 55.2 40.8 48.1 Source: Ghana Living Standards Survey, 1987/88. 16  34. The discrepancy between having had any schooling and being functionally literate arises from two factors-whether literacy Is achieved in school, and whether literacy is retained after leaving school. Too few leaming inputs and poor teacher training and attendance are said to have contributed to a degeneration of the quality of schooling, particulardy in rural areas. Vast linguistic diversity in the country has constrained the supply of teachers, particulariy of those who speak the languages in more remote areas.9 Post-school retention of literacy is reduced by a general shortage of reading materials for aduits, again especially In remote rural areas. Figure 4 Ghana and the NIC's Expenditures for Primary Education As A Percent of Total Education Spending, 1960-89 As % of Toutl Education Spending so .. -- --- -----____ ____ ___ ____ ___ ____ ___ 6661 6a U . . .7 a 7 71 n 7S 74 n 7 Tr n n 7 7 1 4 . . .7 .2 . Ghana + So Korea * Malaysia - Thailand - Singapore Dam Sro.: UNESCODo WarhouB seral lam 9Ghana has over 90 primary ethnic groups and 17 major language groups. 17  35. Are there lessons to be learned about Ghana's education performance from the East Asian NICs? Expenditure patterns appearto yield some. The level of govemment education spending as a percentage of total government expenditures has not been lower In Ghana than in the NICs during the three decades from 1960 (Appendix Figure 1). And although Ghana's spending as a percentage of GOP dipped dramatically in the late 1970s--this ratio was much higher than Korea's, Singapore's, or Thailand's in the 1960s and 1970s--it had climbed back to the same or higher level than the 1960s level for the NICs. One Important historical difference between the allocation of public resources to education in Ghana and in the NICs, however, has been the distribution of spending among the education levels. Whereas primary education received at least about half of total education expenditures in the NiCs In the 1960s, Ghana has been allocating, on average, only about one-third of its resources to the primary level (Figure 4). In the mid-1970s and mid-1980s, this percentage dropped to just about one-fourth. B. Health and Nutrtilon 36. Historically, Ghana was not the outstanding performer in health that it was In education. Health and nutrition indicators suggest that Ghana lags well behind developing countries that have experienced or are experiencing rapid economic growth. The infant mortality rate in 1985--estimated to be 91 per 1,000 live births--is higher than infant mortality in Korea, Malaysia, Mauritius or Singapore in 1960, or Thailand and Zimbabwe in 1970 (Figure 5). According to estimates of the Ministry of Health, one-half of all deaths in Ghana occur at the age group 0-4. The major causes of infant mortality are low birth weight (prematurity), pneumonia, measles, diarrhoea and anaemia. Similar infectious and parasitic diseases, respiratory problems, intestinal worm infestations, and nutrition-related factors claim are the leading causes of death in children under the age of five. More than a third (36.1%) of deaths in this age group are caused by preventable and infectious diseases. 37. If one were to measure the burden of disease, one would find that because communicable and parasftic diseases infect children who comprise a large fraction of the population, these diseases, plus malnutrition and birth-related problems, tend to ba very costly in terms of healthy days lost in the population (Morrow 1984). Malaria alone accounts for 32,600 healthy days lost per 1,000 persons per year, measles for 23,400 healthy days lost, and birth-related causes for 33,200 healthy days lost. 18  Figure 5 Ghana and Other Developing Countries: Infant Mortality Rates Infant Mortality Rato 10X 1960 1966 1970 1976 1980 1986 1990 G- Ghana Kenya Koroa