Addressing the Burden of Education Financing in Low and Lower-Middle-Income Countries: The Role of Savings Accounts, Cash Transfers, and Other Income Sources

Abstract

Cost-sharing between governments and families remains a strategic part of many governments' post-secondary education funding policies in low-income countries. This shift to more cost-sharing raises questions about how households meet their contributions to post-secondary schooling costs. This study uses data from the World Bank's Global Financial Inclusion survey and World Development Indicators to examine how savings account ownership, cash transfers, and other forms of income shape families' decisions about education financing in 59 low and lower-middle-income countries. Results from generalized hierarchical linear modeling and logistic regression models show that individuals with savings accounts are more likely to dedicate resources to educational purposes than those without accounts. Other forms of income (cash transfers excepted) also predict an individual's likelihood of earmarking savings for education to a lesser degree. Our findings offer compelling evidence that greater access to formal savings services may provide a viable long-term strategy to help families prepare financially for their children's future education. These findings may inform future programs that promote financial inclusion and expand access to formal savings services to help individuals and families save for their children's education.

Can financial inclusion improve children’s learning outcomes and late school enrolment in a developing country?

“…Parents are also expected to provide children with care, stimulation, and nutritional inputs for long-term cognitive, emotional, and physical health needed to reduce learning poverty even after enrolling in primary school (World Bank, 2019). According to Elliot III and Lewis (2014); and Ansong et al (2021), recent global policies are gradually shifting more financial burden from governments to parents, which calls for increased savings on the part of parents.…”

“…Since households play a key role in education financing, the role of financial inclusion has become paramount. Some evidence exist in support of a positive relationship between financial inclusion and children's education, health and poverty (Abdul-Mumuni & Koomson, 2019;Ansong et al, 2021;Awaworyi Churchill & Marisetty, 2020;Jalilian & Kirkpatrick, 2002;Koomson et al, 2020a;Q. Zhang & Posso, 2019).…”

“…This is because financial inclusion is directly associated with expansions in parents' ownership of transactions and savings accounts, payment facilities, access to credit and receipt of remittances, which further enhances entrepreneurial propensities, women's empowerment, risk management and investment in education (Ashraf et al, 2010;Bruhn & Love, 2014;Dupas & Robinson, 2013). This notwithstanding, studies on the financial inclusion and child education remain sparse (Ansong et al, 2021;Rosner, 2011).…”

Workers needed to foster improved academic performance: Perspectives of social workers and education officers in Ghana

“…Around the world, education is considered a tool for the foundation of human development and is associated with well-established social and economic benefits including improved health, advancement and use of technology, and individual and household well-being (Rolleston et al, 2011). The importance of education (especially at higher levels) to the development of nations and people around the world can never be overemphasised as the United Nations and other similar bodies have declared as key to the economic and social development (Ansong et al, 2018; Ansong et al, 2021). Efforts are being made by many countries, including Ghana, to improve upon their standards of education and also make schools accessible to every child of school-going age.…”

“…In sub-Saharan Africa (Ghana included), despite the investments and efforts made to expand and improve education, many nations continue to face problems of large numbers of children who are out of school (Ansong et al, 2021). In Ghana, individuals who acquire education up to the basic education level (the first 9 years of formal schooling, which includes 6 years of primary and 3 years of junior secondary schooling) may not be as competitive in the workplace as those who attend school beyond junior high school (JHS) level (Sackey, 2008).…”