one hand with the future benefits to the household, including income returns, on the other (see also Krauss 2012).<sup>21</sup> That is, parents can gain in the shorter term from children who work through their immediate contribution to household productivity and at the same time they can save on costs for education if their children do not attend school. In the longer term, however, such children can have fewer opportunities and earn less later in life as a consequence of a weaker educational background (except when compared to the agricultural self-employed with basic education or less – Table 1). Yet some agriculturally-dependent households that perceive post-basic education to be unattainable for their children due to the associated expenses may be less inclined to send them to primary or lower secondary at all given the lack of returns to formal basic education in rural areas and simply train them on the farm instead. Many farming families may thereby view child labor as an optimal choice and as a kind of practical education that may be more relevant and valuable for their children’s future occupation (see also Humphries 2011).

No returns to rural basic education can be explained by agriculture generally requiring little formal schooling and farming households requiring much manual labor, with labor (and not ‘human capital’) commonly recognized as the principal asset that agricultural households own. Field research in 2010 in Ghana also illustrates that demanded skills and competencies for those living in rural areas are largely attained through ‘learning by doing’ in family farming. Furthermore, although education opportunities in rural areas have begun opening from low levels, there are limited possibilities to apply acquired knowledge and skills outside of the agriculture sector and thus limited labor mobility, i.e. higher completion rates do not appear to have led to many alternative options beyond agricultural livelihoods, especially in the formal sector (World Bank 2011).

**Table 1: Annual income for household heads aged 15 or older relative to their level of** **<u>skills/education and occupational group, 2005/06</u>**

|||Level<br>|of skills/educ|ation acquire<br>Semi-sk|d:<br>illed|(Highly-)|||
|---|---|---|---|---|---|---|---|---|
|||Unskilled||<br>(/skill<br>|<br>ed)|<br>Skilled<br>|Avg.<br>income|# of<br>obs.|
|_US$_|No<br>education|Primary|Lower<br>secondary|Upper<br>secondary|TVET|Higher<br>educ.|||
|_National average _|_127_|_183_|_368_|_763_|_1,130_|_3,652_|_518_|_7,668_|
|Public|390|754|1,217|1,761|2,120|4,033|2,130|565|
|Wageprivate formal|846|835|1,130|1,391|1,913|5,185|1,489|613|
|Wageprivate informal|760|771|902|882|1,250|4,815|923|544|
|Self-employed,agriculture|59|47|56|117|218|1,446|680|3,603|
|Self-employed,business(non-agri.)|33|67|151|224|337|2,467|184|1,890|

_Source_ : Author’s calculations based on GLSS data. Note: Household income is measured here as income from employment, which better captures actual earnings related to one’s level of schooling attained compared to using all sources of household income including income from rent, remittances and other sources. 6% of respondents are not working, for whom data is missing and calculations are not possible. Data for employment in agriculture has been merged to refer to engagement in either crop or export agriculture. TVET stands for Technical Vocational Education and Training.

_The demand for schooling can compete at times with the demand for child labor, often because of labor-intensive agricultural livelihoods_ . Map 1 illustrates that in the Upper West region only two thirds of children attended school (66.9%) and almost half engaged in labor activities (44.7%), while at the other end of the spectrum almost all children in the Ashanti region attended school (96.9%) and child labor is almost nonexistent there (2.9%). The Eastern region is (despite a schooling rate of 97.2%) the outlier in the South for higher levels

> 21 Beyond such a standard economic cost-benefit analysis, households likely also consider the less quantifiable benefits of education including its intrinsic value as an end in itself and its social benefits on improved health, reduced fertility, empowerment, among others (Krauss 2012).

9