Welfare Effects of Skills and Human Capital Development Policies in a DCGE Model of Ghana Article History

Bhattarai, Keshab; Okyere, Emmanuel

Abstract

Based on a 2012 Ghanaian social accounting matrix, we determined how different leisure levels and labour endowments affect household welfare and sectoral outputs. The findings of the leisure experiments point to a pattern in which the wellbeing impacts on wealthiest households are negative. On the other hand, all other households see an increase in their welfare with rural farmer head savannah (hh01) always seeing the highest welfare gains each time. Clearly there are redistribution impacts of leisure labour choice through income and substitution effects. When leisure is reduced in an effort to increase productivity, these rich households see a decrease in their consumption levels and the relatively poorer households see an increase in their welfare. So the question then is how can policy makers make such rich households contribute more to national development through income distributional effects by enhancement in their efficiency. Similar effects are noted when endowments change. Outputs across sectors increase Some household save, spend more on health and education whiles others spend more on consumption, specially on imported goods. The income gap between affluent and poor households is reduced when leisure is reduced (productivity is increased), but the income gap is increased when endowments are increased. The question is, "How might policymakers encourage measures that will boost economic happiness and satisfaction for both wealthy and disadvantaged households?" Rawalsian

Citation

Bhattarai, K., & Okyere, E. (2023). Welfare Effects of Skills and Human Capital Development Policies in a DCGE Model of Ghana Article History. Journal of Development Economics and Finance, 4(1), 1-18. https://doi.org/10.47509/JDEF.2023.v04i01.01

• Journal Article Type: Article
• Acceptance Date: Jan 10, 2023
• Online Publication Date: Apr 17, 2023
• Publication Date: 2023
• Deposit Date: Apr 10, 2023
• Publicly Available Date: Apr 17, 2023
• Publisher: ARF India
• Peer Reviewed: Peer Reviewed
• Volume: 4
• Issue: 1
• Pages: 1-18
• DOI: https://doi.org/10.47509/JDEF.2023.v04i01.01
• Keywords: Dynamic CGE model of Ghana; Skill and Human capital; growth and redistribution
• Public URL: https://hull-repository.worktribe.com/output/4259934