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

Abstract

This study uses comprehensive household data from Ghana to examine the link between financial inclusion and children's learning outcomes and late school enrolment. After resolving endogeneity, we find that a standard deviation increase in financial inclusion is associated with 0.7882 to 0.9504 standard deviations increase in children's learning outcomes. It also reduces late school enrolment by 0.9493 standard deviation. Financial inclusion enhances learning and schooling outcomes more for girls and urban children. These findings are robust to different indicators of learning outcomes and alternative approaches to addressing endogeneity. Parents' ability to spend on extra classes and on books and other school-related supplies serve as possible channels through which financial inclusion affects children's educational outcomes.

Risk Preference and Child Learning outcomes: A Study on Ghana

“…Child's ability to read and write text in Ghanaian language respectively are the third and fourth indicator variables, whereas child's ability to do simple calculations is the fifth indicator variable. Choosing these indicator variables was informed by existing literature (Frempong, Orkoh, & Kofinti, 2021;Kofinti et al, 2022;Koomson & Afoakwah, 2023). Additionally, we constructed an additive index from the 5 indicator variables to measure the overall academic performance of a child in the study.…”

“…Evidence shows that in developing countries, about 80% of children between the ages of 10 to 12 years are unable to read. Sub-Saharan Africa, for example, have about 87% of children lacking reading competence compared to 53% in other low-and middle-income countries (World Bank, 2019;Koomson & Afoakwah, 2023).…”

“…This appalling condition has spurred the interest of policy makers and scholars to investigate the possible causes and to suggest solutions to mitigating the poor learning outcomes. In developing countries, aside socio-economic factors, empirical studies have attributed the poor learning outcomes to factors such as lack of teaching resources and learning materials (Mupa & Chinooneka, 2015); malnutrition and child health (Glewwe & Miguel, 2007); dearth of health financing programmes ( Kofinti, Baako-Amponsah, & Danso, 2022); poverty and loss of confidence in education (Imoro, 2010;Koomson & Afoakwah, 2023); child labour (Heady, 2000;Frempong & Stadelmann, 2021); underdeveloped school infrastructure (Chowa, Masa, Ramos & Ansong, 2015); and longer distance travelled to and from school and teacher absenteeism (Afoakwah & Koomson, 2021;Nunoo, Taale, Sebu, & Adama, 2023). However, studies in advanced countries like Italy, Germany, USA, and Mexico have alluded that the risk attitudes of households are key contributing factors to the poor educational outcomes of children (Brown, Ortiz Nunez, & Taylor, 2006;Checchi, Fsiorio, & Leonardi, 2014;Mu & Du, 2017;Sovero, 2018).…”

Firms' digital investment and resilience to shocks: Evidence from the COVID‐19 pandemic in Ghana

“…Without valid external instruments, this technique has proven to provide consistent estimates (Lewbel, 2012). Moreover, its implementation is evident in several recent empirical studies (Frempong et al, 2021;Kofinti et al, 2022;Koomson & Afoakwah, 2023;Koomson & Danquah, 2021).…”

Does financial inclusion empower women in Africa?

“…The study shows that financial development reduces child mortality (under 5 years) and increases life expectancy. Using comprehensive household data from Ghana, Koomson and Afoakwah (2022) examine the nexus between financial inclusion and education outcomes. The study shows that financial inclusion significantly increases children's learning outcomes, and reduces late school enrolment.…”